Revenue Beat: Sudarshan Chemical Industries Limited Exceeded Revenue Forecasts By 15% And Analysts Are Updating Their Estimates

Sudarshan Chemical Industries Limited (NSE:SUDARSCHEM) last week reported its latest interim results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Sudarshan Chemical Industries beat revenue forecasts by a solid 15% to hit ₹7.8b. Statutory earnings per share came in at ₹20.90, in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Sudarshan Chemical Industries

Taking into account the latest results, the consensus forecast from Sudarshan Chemical Industries' nine analysts is for revenues of ₹17.5b in 2021, which would reflect an okay 5.9% improvement in sales compared to the last 12 months. Per-share earnings are expected to swell 13% to ₹17.03. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹17.1b and earnings per share (EPS) of ₹17.20 in 2021. There doesn't appear to have been a major change in sentiment following the results, other than the small lift in revenue estimates.

The consensus price target increased 10% to ₹531, with an improved revenue forecast carrying the promise of a more valuable business, in time. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Sudarshan Chemical Industries, with the most bullish analyst valuing it at ₹600 and the most bearish at ₹492 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. Next year brings more of the same, according to the analysts, with revenue forecast to grow 5.9%, in line with its 6.7% annual growth over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 16% per year. So it's pretty clear that Sudarshan Chemical Industries is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Sudarshan Chemical Industries going out to 2023, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Sudarshan Chemical Industries that we have uncovered.

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