Analyst Estimates: Here’s What Brokers Think Of Asian Paints Limited (NSE:ASIANPAINT) After Its Third-Quarter Report

Shareholders might have noticed that Asian Paints Limited (NSE:ASIANPAINT) filed its quarterly result this time last week. The early response was not positive, with shares down 3.4% to ₹3,166 in the past week. Results look mixed – while revenue fell marginally short of analyst estimates at ₹91b, statutory earnings beat expectations 3.4%, with Asian Paints reporting profits of ₹15.10 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.

See our latest analysis for Asian Paints

NSEI:ASIANPAINT Earnings and Revenue Growth January 20th 2024

Taking into account the latest results, the consensus forecast from Asian Paints’ 35 analysts is for revenues of ₹400.7b in 2025. This reflects a decent 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 5.7% to ₹59.92. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹411.9b and earnings per share (EPS) of ₹59.77 in 2025. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The consensus has reconfirmed its price target of ₹3,337, showing that the analysts don’t expect weaker revenue expectations next year to have a material impact on Asian Paints’ market value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Asian Paints analyst has a price target of ₹4,020 per share, while the most pessimistic values it at ₹2,500. As you can see, analysts are not all in agreement on the stock’s future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. It’s pretty clear that there is an expectation that Asian Paints’ revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 10% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Compare this to the 317 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 11% per year. So it’s pretty clear that, while Asian Paints’ revenue growth is expected to slow, it’s expected to grow roughly in line with the 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. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at ₹3,337, 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 Asian Paints. Long-term earnings power is much more important than next year’s profits. At Simply Wall St, we have a full range of analyst estimates for Asian Paints going out to 2026, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.

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