Earnings Update: Here's Why Analysts Just Lifted Their Blue Star Limited (NSE:BLUESTARCO) Price Target To ₹1,605

Blue Star Limited (NSE:BLUESTARCO) just released its latest first-quarter report and things are not looking great. Results look to have been somewhat negative - revenue fell 3.2% short of analyst estimates at ₹29b, and statutory earnings of ₹8.21 per share missed forecasts by 4.8%. 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.

Check out our latest analysis for Blue Star

Taking into account the latest results, the most recent consensus for Blue Star from 21 analysts is for revenues of ₹118.0b in 2025. If met, it would imply a notable 14% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 19% to ₹29.04. In the lead-up to this report, the analysts had been modelling revenues of ₹118.1b and earnings per share (EPS) of ₹27.97 in 2025. So the consensus seems to have become somewhat more optimistic on Blue Star's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 7.9% to ₹1,605. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Blue Star, with the most bullish analyst valuing it at ₹1,873 and the most bearish at ₹971 per share. 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.

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. We can infer from the latest estimates that forecasts expect a continuation of Blue Star'shistorical trends, as the 19% annualised revenue growth to the end of 2025 is roughly in line with the 17% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 15% annually. So it's pretty clear that Blue Star is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Blue Star's earnings potential next year. 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. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Blue Star going out to 2027, and you can see them free on our platform here.

Even so, be aware that Blue Star is showing 2 warning signs in our investment analysis , you should know about...

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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.