Archean Chemical Industries Limited (NSE:ACI) Analysts Just Slashed This Year's Estimates

Market forces rained on the parade of Archean Chemical Industries Limited (NSE:ACI) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the four analysts covering Archean Chemical Industries are now predicting revenues of ₹18b in 2025. If met, this would reflect a major 29% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 52% to ₹39.30. Before this latest update, the analysts had been forecasting revenues of ₹20b and earnings per share (EPS) of ₹47.90 in 2025. Indeed, we can see that the analysts are a lot more bearish about Archean Chemical Industries' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Archean Chemical Industries

Analysts made no major changes to their price target of ₹738, suggesting the downgrades are not expected to have a long-term impact on Archean Chemical Industries' valuation.

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 Archean Chemical Industries' rate of growth is expected to accelerate meaningfully, with the forecast 29% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 22% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Archean Chemical Industries is expected to grow much faster than its industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Archean Chemical Industries. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Archean Chemical Industries.

Still, 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 Archean Chemical Industries going out to 2027, and you can see them free on our platform here.

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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.