Earnings Miss: Somany Ceramics Limited Missed EPS By 21% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Somany Ceramics Limited (NSE:SOMANYCERA) filed its second-quarter result this time last week. The early response was not positive, with shares down 5.5% to ₹648 in the past week. It looks like a pretty bad result, all things considered. Although revenues of ₹6.7b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 21% to hit ₹4.18 per share. 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.

View our latest analysis for Somany Ceramics

Taking into account the latest results, the current consensus from Somany Ceramics' 15 analysts is for revenues of ₹27.4b in 2025. This would reflect a satisfactory 5.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 45% to ₹29.24. In the lead-up to this report, the analysts had been modelling revenues of ₹27.9b and earnings per share (EPS) of ₹30.24 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at ₹910, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values Somany Ceramics at ₹1,001 per share, while the most bearish prices it at ₹770. This is a very narrow spread of estimates, implying either that Somany Ceramics is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Somany Ceramics' past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Somany Ceramics'historical trends, as the 11% annualised revenue growth to the end of 2025 is roughly in line with the 12% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 15% per year. So although Somany Ceramics is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Somany Ceramics. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. 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.

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 Somany Ceramics going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Somany Ceramics that we have uncovered.

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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.