Sumitomo Chemical India Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Sumitomo Chemical India Limited (NSE:SUMICHEM) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat expectations with revenues of ₹29b arriving 3.4% ahead of forecasts. Statutory earnings per share (EPS) were ₹7.40, 8.7% ahead of estimates. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Sumitomo Chemical India

After the latest results, the seven analysts covering Sumitomo Chemical India are now predicting revenues of ₹33.1b in 2025. If met, this would reflect a meaningful 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 39% to ₹10.25. Before this earnings report, the analysts had been forecasting revenues of ₹33.8b and earnings per share (EPS) of ₹9.61 in 2025. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

The average price target increased 7.6% to ₹459, with the analysts signalling that the improved earnings outlook is more important to the company's valuation than its revenue. 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 Sumitomo Chemical India analyst has a price target of ₹550 per share, while the most pessimistic values it at ₹410. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Sumitomo Chemical India shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Sumitomo Chemical India's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 7.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Sumitomo Chemical India is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Sumitomo Chemical India's earnings potential next year. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Even so, earnings per share are more important to the intrinsic value of the business. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Sumitomo Chemical India going out to 2027, and you can see them free on our platform here..

You can also see our analysis of Sumitomo Chemical India's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.