Solar Industries India Limited Just Recorded A 18% Revenue Beat: Here's What Analysts Think

Solar Industries India Limited (NSE:SOLARINDS) shareholders are probably feeling a little disappointed, since its shares fell 6.0% to ₹2,332 in the week after its latest third-quarter results. It was a mildly positive result, with revenues exceeding expectations at ₹10b, while statutory earnings per share (EPS) of ₹30.54 were in line with analyst forecasts. 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.

View our latest analysis for Solar Industries India

After the latest results, the four analysts covering Solar Industries India are now predicting revenues of ₹42.4b in 2023. If met, this would reflect a substantial 24% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 40% to ₹56.20. Before this earnings report, the analysts had been forecasting revenues of ₹41.4b and earnings per share (EPS) of ₹57.23 in 2023. There doesn't appear to have been a major change in sentiment following the results, other than the small increase to revenue estimates.

Even though revenue forecasts increased, there was no change to the consensus price target of ₹2,411, suggesting the analysts are focused on earnings as the driver of value creation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Solar Industries India analyst has a price target of ₹2,541 per share, while the most pessimistic values it at ₹2,259. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Solar Industries India's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 12% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Solar Industries India to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at ₹2,411, 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 estimates - from multiple Solar Industries India analysts - going out to 2024, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Solar Industries India , and understanding this should be part of your investment process.

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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.