Asian Paints Limited Just Missed Earnings - But Analysts Have Updated Their Models

There's been a notable change in appetite for Asian Paints Limited (NSE:ASIANPAINT) shares in the week since its half-yearly report, with the stock down 13% to ₹2,543. Statutory earnings per share disappointed, coming in -39% short of expectations, at ₹7.24. Fortunately revenue performance was a lot stronger at ₹170b arriving 12% ahead of predictions. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Asian Paints

Following the latest results, Asian Paints' 36 analysts are now forecasting revenues of ₹363.7b in 2025. This would be a modest 4.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 2.7% to ₹48.90. Before this earnings report, the analysts had been forecasting revenues of ₹371.1b and earnings per share (EPS) of ₹52.83 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at ₹2,908, 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. There are some variant perceptions on Asian Paints, with the most bullish analyst valuing it at ₹3,880 and the most bearish at ₹2,100 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Asian Paints' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 9.4% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Asian Paints.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at ₹2,908, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Asian Paints. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Asian Paints analysts - 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 Asian Paints 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.