Sheela Foam Limited Just Beat Revenue Estimates By 13%

The third-quarter results for Sheela Foam Limited (NSE:SFL) were released last week, making it a good time to revisit its performance. It was a mildly positive result, with revenues exceeding expectations at ₹8.8b, while statutory earnings per share (EPS) of ₹20.81 were in line with analyst forecasts. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Sheela Foam

Following the latest results, Sheela Foam's two analysts are now forecasting revenues of ₹41.1b in 2025. This would be a substantial 43% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 66% to ₹24.90. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹43.3b and earnings per share (EPS) of ₹35.20 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The consensus price target fell 6.8% to ₹1,233, with the weaker earnings outlook clearly leading valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Sheela Foam's rate of growth is expected to accelerate meaningfully, with the forecast 33% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 8.6% 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 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Sheela Foam to grow faster 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 Sheela Foam. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Sheela Foam's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Sheela Foam. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Sheela Foam going out as far as 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Sheela Foam .

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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.