Earnings Report: Finolex Industries Limited Missed Revenue Estimates By 8.6%

Finolex Industries Limited (NSE:FINPIPE) shareholders are probably feeling a little disappointed, since its shares fell 4.1% to ₹231 in the week after its latest quarterly results. Results look mixed - while revenue fell marginally short of analyst estimates at ₹10b, statutory earnings were in line with expectations, at ₹4.04 per share. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Finolex Industries

After the latest results, the eleven analysts covering Finolex Industries are now predicting revenues of ₹50.4b in 2025. If met, this would reflect a decent 19% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 23% to ₹9.50. Before this earnings report, the analysts had been forecasting revenues of ₹51.5b and earnings per share (EPS) of ₹9.96 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The analysts made no major changes to their price target of ₹229, suggesting the downgrades are not expected to have a long-term impact on Finolex Industries' 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. The most optimistic Finolex Industries analyst has a price target of ₹270 per share, while the most pessimistic values it at ₹150. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Finolex Industries' rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 11% 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. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Finolex Industries 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 Finolex Industries. 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 held steady at ₹229, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Finolex Industries going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Finolex Industries has 1 warning sign 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.