Tata Chemicals Limited Just Missed EPS By 31%: Here's What Analysts Think Will Happen Next

Tata Chemicals Limited (NSE:TATACHEM) shareholders are probably feeling a little disappointed, since its shares fell 4.0% to ₹987 in the week after its latest quarterly results. It looks like a pretty bad result, all things considered. Although revenues of ₹37b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 31% to hit ₹6.20 per share. 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. 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 Tata Chemicals

Taking into account the latest results, Tata Chemicals' seven analysts currently expect revenues in 2025 to be ₹162.3b, approximately in line with the last 12 months. Statutory earnings per share are forecast to nosedive 32% to ₹48.57 in the same period. In the lead-up to this report, the analysts had been modelling revenues of ₹167.4b and earnings per share (EPS) of ₹65.79 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 8.0% to ₹884. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Tata Chemicals at ₹1,141 per share, while the most bearish prices it at ₹781. 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.

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. We would highlight that revenue is expected to reverse, with a forecast 0.6% annualised decline to the end of 2025. That is a notable change from historical growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 12% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Tata Chemicals is expected to lag 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Tata Chemicals. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Tata Chemicals going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Tata Chemicals that you need to take into consideration.

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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.