Earnings Beat: Asahi India Glass Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

As you might know, Asahi India Glass Limited (NSE:ASAHIINDIA) just kicked off its latest full-year results with some very strong numbers. Results were good overall, with revenues beating analyst predictions by 2.1% to hit ₹25b. Statutory earnings per share (EPS) came in at ₹5.47, some 5.2% above whatthe analyst had expected. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.

See our latest analysis for Asahi India Glass

Following the latest results, Asahi India Glass' sole analyst are now forecasting revenues of ₹28.4b in 2022. This would be a solid 16% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 70% to ₹9.30. Before this earnings report, the analyst had been forecasting revenues of ₹29.8b and earnings per share (EPS) of ₹10.10 in 2022. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

What's most unexpected is that the consensus price target rose 8.9% to ₹387, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analyst is definitely expecting Asahi India Glass' growth to accelerate, with the forecast 16% annualised growth to the end of 2022 ranking favourably alongside historical growth of 1.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. Asahi India Glass is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Sadly, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. There was also a nice increase in the price target, with the analyst 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 analyst estimates for Asahi India Glass going out as far as 2024, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Asahi India Glass , and understanding it should be part of your investment process.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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