SRF Limited Just Missed EPS By 7.1%: Here's What Analysts Think Will Happen Next

SRF Limited (NSE:SRF) missed earnings with its latest second-quarter results, disappointing overly-optimistic forecasters. Results look to have been somewhat negative - revenue fell 4.9% short of analyst estimates at ₹36b, and statutory earnings of ₹13.10 per share missed forecasts by 7.1%. 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.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Taking into account the latest results, the most recent consensus for SRF from 30 analysts is for revenues of ₹164.8b in 2026. If met, it would imply a satisfactory 8.0% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 20% to ₹65.68. In the lead-up to this report, the analysts had been modelling revenues of ₹168.4b and earnings per share (EPS) of ₹65.35 in 2026. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

Check out our latest analysis for SRF

The average price target was steady at ₹3,174even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values SRF at ₹3,842 per share, while the most bearish prices it at ₹2,080. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting SRF's growth to accelerate, with the forecast 17% annualised growth to the end of 2026 ranking favourably alongside historical growth of 10% per annum 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 13% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that SRF is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at ₹3,174, 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 SRF going out to 2028, and you can see them free on our platform here.

It might also be worth considering whether SRF's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.