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Kansai Nerolac Paints Limited Just Beat Revenue By 6.4%: Here's What Analysts Think Will Happen Next
It's been a pretty great week for Kansai Nerolac Paints Limited (NSE:KANSAINER) shareholders, with its shares surging 11% to ₹196 in the week since its latest second-quarter results. It was a workmanlike result, with revenues of ₹23b coming in 6.4% ahead of expectations, and statutory earnings per share of ₹7.28, in line with analyst appraisals. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Kansai Nerolac Paints' 14 analysts are now forecasting revenues of ₹88.8b in 2027. This would be a reasonable 3.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to climb 18% to ₹8.91. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹89.3b and earnings per share (EPS) of ₹8.91 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
Check out our latest analysis for Kansai Nerolac Paints
The analysts reconfirmed their price target of ₹246, showing that the business is executing well and in line with expectations. 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 Kansai Nerolac Paints at ₹316 per share, while the most bearish prices it at ₹193. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Kansai Nerolac Paints shareholders.
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. The analysts are definitely expecting Kansai Nerolac Paints' growth to accelerate, with the forecast 6.0% annualised growth to the end of 2027 ranking favourably alongside historical growth of 4.8% per annum 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, Kansai Nerolac Paints is expected to grow slower than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Kansai Nerolac Paints' revenue is expected to 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 in mind, we wouldn't be too quick to come to a conclusion on Kansai Nerolac Paints. Long-term earnings power is much more important than next year's profits. We have forecasts for Kansai Nerolac Paints going out to 2029, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Kansai Nerolac Paints that you should be aware of.
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