Results: SRF Limited Exceeded Expectations And The Consensus Has Updated Its Estimates
SRF Limited (NSE:SRF) just released its first-quarter report and things are looking bullish. SRF delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting ₹50b-17% above indicated-and₹25.60-34% above forecasts- respectively 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on SRF after the latest results.
Taking into account the latest results, the current consensus from SRF's 28 analysts is for revenues of ₹182.1b in 2027. This would reflect a credible 7.1% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 10% to ₹80.56. In the lead-up to this report, the analysts had been modelling revenues of ₹177.9b and earnings per share (EPS) of ₹75.27 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
Check out our latest analysis for SRF
Despite these upgrades,the analysts have not made any major changes to their price target of ₹2,939, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. There are some variant perceptions on SRF, with the most bullish analyst valuing it at ₹3,609 and the most bearish at ₹2,212 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. The analysts are definitely expecting SRF's growth to accelerate, with the forecast 9.6% annualised growth to the end of 2027 ranking favourably alongside historical growth of 6.6% 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, SRF is expected to grow slower than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards SRF following these results. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at ₹2,939, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for SRF going out to 2029, and you can see them free on our platform here..
Plus, you should also learn about the 1 warning sign we've spotted with SRF .
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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.