Asian Paints Limited Just Missed EPS By 14%: Here's What Analysts Think Will Happen Next

Asian Paints Limited (NSE:ASIANPAINT) shareholders are probably feeling a little disappointed, since its shares fell 4.6% to ₹2,300 in the week after its latest yearly results. Revenues were in line with forecasts, at ₹345b, although statutory earnings per share came in 14% below what the analysts expected, at ₹38.25 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the most recent consensus for Asian Paints from 34 analysts is for revenues of ₹357.9b in 2026. If met, it would imply a credible 3.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to ascend 19% to ₹45.55. Before this earnings report, the analysts had been forecasting revenues of ₹369.5b and earnings per share (EPS) of ₹48.89 in 2026. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

Check out our latest analysis for Asian Paints

The analysts made no major changes to their price target of ₹2,346, suggesting the downgrades are not expected to have a long-term impact on Asian Paints' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Asian Paints, with the most bullish analyst valuing it at ₹3,400 and the most bearish at ₹1,966 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Asian Paints' revenue growth is expected to slow, with the forecast 3.8% annualised growth rate until the end of 2026 being well below the historical 13% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. 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 biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Asian Paints. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Asian Paints going out to 2028, and you can see them free on our platform here.

You still need to take note of risks, for example - Asian Paints has 2 warning signs we think you should be aware of.

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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.