These Analysts Think Balaji Amines Limited's (NSE:BALAMINES) Sales Are Under Threat

One thing we could say about the analysts on Balaji Amines Limited (NSE:BALAMINES) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the latest consensus from Balaji Amines' two analysts is for revenues of ₹29b in 2024, which would reflect a decent 9.9% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 42% to ₹170. Before this latest update, the analysts had been forecasting revenues of ₹33b and earnings per share (EPS) of ₹179 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a minor downgrade to EPS estimates to boot.

Check out our latest analysis for Balaji Amines

It'll come as no surprise then, to learn that the analysts have cut their price target 5.9% to ₹4,166. 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. Currently, the most bullish analyst values Balaji Amines at ₹4,540 per share, while the most bearish prices it at ₹3,789. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Balaji Amines' revenue growth is expected to slow, with the forecast 7.8% annualised growth rate until the end of 2024 being well below the historical 31% 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. Factoring in the forecast slowdown in growth, it seems obvious that Balaji Amines is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Balaji Amines' future valuation. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Balaji Amines after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Balaji Amines going out as far as 2024, 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.