Earnings Update: Tata Chemicals Limited (NSE:TATACHEM) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts

Last week saw the newest first-quarter earnings release from Tata Chemicals Limited (NSE:TATACHEM), an important milestone in the company's journey to build a stronger business. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 7.6%to hit ₹43b. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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After the latest results, the nine analysts covering Tata Chemicals are now predicting revenues of ₹160.0b in 2027. If met, this would reflect a modest 5.8% improvement in revenue compared to the last 12 months. Tata Chemicals is also expected to turn profitable, with statutory earnings of ₹16.78 per share. Before this earnings report, the analysts had been forecasting revenues of ₹159.8b and earnings per share (EPS) of ₹22.21 in 2027. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

View our latest analysis for Tata Chemicals

The consensus price target held steady at ₹701, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Tata Chemicals at ₹816 per share, while the most bearish prices it at ₹567. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Tata Chemicals' rate of growth is expected to accelerate meaningfully, with the forecast 7.8% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 3.7% p.a. 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 12% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Tata Chemicals is expected to grow slower than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Tata Chemicals. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Tata Chemicals going out to 2029, 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.