Earnings Release: Here's Why Analysts Cut Their Balkrishna Industries Limited (NSE:BALKRISIND) Price Target To ₹2,628

Last week, you might have seen that Balkrishna Industries Limited (NSE:BALKRISIND) released its yearly result to the market. The early response was not positive, with shares down 7.4% to ₹2,492 in the past week. It looks like the results were a bit of a negative overall. While revenues of ₹104b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.1% to hit ₹85.61 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following the latest results, Balkrishna Industries' eleven analysts are now forecasting revenues of ₹115.9b in 2026. This would be a decent 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 11% to ₹94.79. In the lead-up to this report, the analysts had been modelling revenues of ₹116.4b and earnings per share (EPS) of ₹99.76 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

View our latest analysis for Balkrishna Industries

It might be a surprise to learn that the consensus price target fell 6.5% to ₹2,628, with the analysts clearly linking lower forecast earnings to the performance of the stock price. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Balkrishna Industries analyst has a price target of ₹3,402 per share, while the most pessimistic values it at ₹1,910. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Balkrishna Industries' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.7% per year. Even after the forecast slowdown in growth, it seems obvious that Balkrishna Industries is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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. At Simply Wall St, we have a full range of analyst estimates for Balkrishna Industries going out to 2028, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Balkrishna Industries that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.