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Nippon Life India Asset Management Limited Just Missed EPS By 20%: Here's What Analysts Think Will Happen Next
There's been a notable change in appetite for Nippon Life India Asset Management Limited (NSE:NAM-INDIA) shares in the week since its second-quarter report, with the stock down 11% to ₹919. It was not a great result overall. While revenues of ₹8.2b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 20% to hit ₹4.98 per share. 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.
Taking into account the latest results, the most recent consensus for Nippon Life India Asset Management from 24 analysts is for revenues of ₹33.9b in 2027. If met, it would imply an okay 4.7% increase on its revenue over the past 12 months. Per-share earnings are expected to grow 10% to ₹27.84. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹33.9b and earnings per share (EPS) of ₹28.72 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
See our latest analysis for Nippon Life India Asset Management
The consensus price target held steady at ₹1,182, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Nippon Life India Asset Management analyst has a price target of ₹1,320 per share, while the most pessimistic values it at ₹960. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Nippon Life India Asset Management's past performance and to peers in the same industry. We would highlight that Nippon Life India Asset Management's revenue growth is expected to slow, with the forecast 9.6% annualised growth rate until the end of 2027 being well below the historical 18% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. Factoring in the forecast slowdown in growth, it seems obvious that Nippon Life India Asset Management is also expected to grow slower than other industry participants.
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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at ₹1,182, with the latest estimates not enough to have an impact on their price targets.
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 forecasts for Nippon Life India Asset Management 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 Nippon Life India Asset Management that you need to take into consideration.
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