Earnings Update: Here's Why Analysts Just Lifted Their Sumitomo Chemical India Limited (NSE:SUMICHEM) Price Target To ₹539

Sumitomo Chemical India Limited (NSE:SUMICHEM) last week reported its latest first-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results were roughly in line with estimates, with revenues of ₹8.4b and statutory earnings per share of ₹2.54. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Sumitomo Chemical India

Taking into account the latest results, the current consensus from Sumitomo Chemical India's six analysts is for revenues of ₹33.2b in 2025. This would reflect a solid 12% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to climb 16% to ₹10.09. Before this earnings report, the analysts had been forecasting revenues of ₹33.0b and earnings per share (EPS) of ₹9.80 in 2025. So the consensus seems to have become somewhat more optimistic on Sumitomo Chemical India's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 11% to ₹539. 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 Sumitomo Chemical India analyst has a price target of ₹640 per share, while the most pessimistic values it at ₹410. 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.

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. The analysts are definitely expecting Sumitomo Chemical India's growth to accelerate, with the forecast 17% annualised growth to the end of 2025 ranking favourably alongside historical growth of 0.6% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Sumitomo Chemical India is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Sumitomo Chemical India following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Sumitomo Chemical India analysts - going out to 2027, and you can see them free on our platform here.

We also provide an overview of the Sumitomo Chemical India Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.

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