Earnings Miss: Indigo Paints Limited Missed EPS By 12% And Analysts Are Revising Their Forecasts

Last week, you might have seen that Indigo Paints Limited (NSE:INDIGOPNTS) released its half-year result to the market. The early response was not positive, with shares down 8.5% to ₹1,534 in the past week. Revenues were in line with forecasts, at ₹6.1b, although statutory earnings per share came in 12% below what the analysts expected, at ₹4.74 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Indigo Paints

Taking into account the latest results, the current consensus from Indigo Paints' seven analysts is for revenues of ₹14.9b in 2025. This would reflect a meaningful 11% increase on its revenue over the past 12 months. Per-share earnings are expected to step up 14% to ₹33.44. Before this earnings report, the analysts had been forecasting revenues of ₹14.9b and earnings per share (EPS) of ₹34.59 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 small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹1,607, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Indigo Paints at ₹1,905 per share, while the most bearish prices it at ₹1,325. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Indigo Paints' past performance and to peers in the same industry. It's clear from the latest estimates that Indigo Paints' rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 17% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Indigo Paints to grow faster than the wider industry.

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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at ₹1,607, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Indigo Paints going out to 2027, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months 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.