Kansai Nerolac Paints Limited (NSE:KANSAINER) Just Released Its Third-Quarter Results And Analysts Are Updating Their Estimates
Kansai Nerolac Paints Limited (NSE:KANSAINER) shareholders are probably feeling a little disappointed, since its shares fell 3.2% to ₹218 in the week after its latest third-quarter results. It was a credible result overall, with revenues of ₹20b and statutory earnings per share of ₹14.12 both in line with analyst estimates, showing that Kansai Nerolac Paints is executing 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.
Taking into account the latest results, the most recent consensus for Kansai Nerolac Paints from 14 analysts is for revenues of ₹87.1b in 2027. If met, it would imply a meaningful 10.0% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 28% to ₹9.25. In the lead-up to this report, the analysts had been modelling revenues of ₹88.0b and earnings per share (EPS) of ₹9.62 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
View our latest analysis for Kansai Nerolac Paints
The consensus price target held steady at ₹256, 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. Currently, the most bullish analyst values Kansai Nerolac Paints at ₹332 per share, while the most bearish prices it at ₹212. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 7.9% growth on an annualised basis. That is in line with its 7.8% annual growth 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 revenues grow 13% per year. So although Kansai Nerolac Paints is expected to maintain its revenue growth rate, it's forecast to grow slower than 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 Kansai Nerolac Paints. 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. The consensus price target held steady at ₹256, 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 Kansai Nerolac Paints. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Kansai Nerolac Paints analysts - going out to 2028, and you can see them free on our platform here.
Before you take the next step you should know about the 2 warning signs for Kansai Nerolac Paints that we have uncovered.
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