SRF Limited Just Missed EPS By 25%: Here's What Analysts Think Will Happen Next

It's shaping up to be a tough period for SRF Limited (NSE:SRF), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Results showed a clear earnings miss, with ₹31b revenue coming in 5.2% lower than what the analystsexpected. Statutory earnings per share (EPS) of ₹8.55 missed the mark badly, arriving some 25% below what was expected. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for SRF

Following the latest results, SRF's 26 analysts are now forecasting revenues of ₹156.2b in 2025. This would be a solid 17% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 32% to ₹65.57. Before this earnings report, the analysts had been forecasting revenues of ₹165.8b and earnings per share (EPS) of ₹74.01 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the ₹2,476 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 SRF at ₹2,898 per share, while the most bearish prices it at ₹1,565. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the SRF's past performance and to peers in the same industry. We would highlight that SRF's revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2025 being well below the historical 18% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% annually. Factoring in the forecast slowdown in growth, it looks like SRF is forecast to grow at about the same rate as 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. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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.

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 SRF going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for SRF that you need to be mindful 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.