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Sumitomo Chemical India Limited (NSE:SUMICHEM) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
It's been a sad week for Sumitomo Chemical India Limited (NSE:SUMICHEM), who've watched their investment drop 13% to ₹335 in the week since the company reported its quarterly result. Results were roughly in line with estimates, with revenues of ₹9.1b and statutory earnings per share of ₹10.88. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sumitomo Chemical India after the latest results.
Taking into account the latest results, the consensus forecast from Sumitomo Chemical India's nine analysts is for revenues of ₹32.9b in 2027. This reflects an okay 2.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to shrink 3.6% to ₹10.80 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹35.2b and earnings per share (EPS) of ₹12.66 in 2027. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.
Check out our latest analysis for Sumitomo Chemical India
The consensus price target fell 14% to ₹507, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Sumitomo Chemical India, with the most bullish analyst valuing it at ₹650 and the most bearish at ₹430 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Sumitomo Chemical India's rate of growth is expected to accelerate meaningfully, with the forecast 4.4% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 0.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 12% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Sumitomo Chemical India is expected to grow slower than 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Sumitomo Chemical India 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 Sumitomo Chemical India that you need to take into consideration.
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