Greenlam Industries Limited (NSE:GREENLAM) Just Reported Yearly Earnings: Have Analysts Changed Their Mind On The Stock?

Greenlam Industries Limited (NSE:GREENLAM) shareholders are probably feeling a little disappointed, since its shares fell 3.1% to ₹569 in the week after its latest yearly results. Greenlam Industries reported ₹23b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of ₹10.85 beat expectations, being 2.6% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Greenlam Industries

Following the latest results, Greenlam Industries' twelve analysts are now forecasting revenues of ₹28.5b in 2025. This would be a substantial 22% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 25% to ₹13.61. Before this earnings report, the analysts had been forecasting revenues of ₹29.2b and earnings per share (EPS) of ₹13.74 in 2025. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The average price target was steady at ₹616even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. 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. The most optimistic Greenlam Industries analyst has a price target of ₹682 per share, while the most pessimistic values it at ₹506. This is a very narrow spread of estimates, implying either that Greenlam Industries is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. It's clear from the latest estimates that Greenlam Industries' rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 15% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Greenlam Industries is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Yet - earnings are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Greenlam Industries going out to 2027, and you can see them free on our platform here.

Even so, be aware that Greenlam Industries is showing 3 warning signs in our investment analysis , and 2 of those make us uncomfortable...

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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.