EN
Revenue Beat: Finolex Industries Limited Exceeded Revenue Forecasts By 15% And Analysts Are Updating Their Estimates
Last week, you might have seen that Finolex Industries Limited (NSE:FINPIPE) released its quarterly result to the market. The early response was not positive, with shares down 2.4% to ₹138 in the past week. Finolex Industries beat revenue forecasts by a solid 15% to hit ₹11b. Statutory earnings per share came in at ₹9.69, in line with expectations. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
After the latest results, the eleven analysts covering Finolex Industries are now predicting revenues of ₹44.6b in 2027. If met, this would reflect a reasonable 6.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to sink 14% to ₹8.45 in the same period. In the lead-up to this report, the analysts had been modelling revenues of ₹44.4b and earnings per share (EPS) of ₹9.13 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.
View our latest analysis for Finolex Industries
The consensus price target held steady at ₹189, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Finolex Industries analyst has a price target of ₹265 per share, while the most pessimistic values it at ₹159. 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.
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. For example, we noticed that Finolex Industries' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 13% growth to the end of 2027 on an annualised basis. That is well above its historical decline of 3.0% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 12% per year. So it looks like Finolex Industries is expected to grow at about the same rate as 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 Finolex Industries. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at ₹189, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Finolex Industries. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Finolex Industries analysts - going out to 2029, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Finolex Industries you should know about.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.