There's been a notable change in appetite for Atul Ltd (NSE:ATUL) shares in the week since its half-year report, with the stock down 12% to ₹5,354. Statutory earnings per share of ₹136 unfortunately missed expectations by 13%, although it was encouraging to see revenues of ₹19b exceed expectations by 2.6%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, Atul's twelve analysts are now forecasting revenues of ₹74.8b in 2027. This would be a credible 7.3% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be ₹267, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of ₹72.0b and earnings per share (EPS) of ₹282 in 2027. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a credible to revenue, the consensus also made a small dip in its earnings per share forecasts.
View our latest analysis for Atul
The consensus price target fell 6.4% to ₹7,336, suggesting that the analysts are primarily focused on earnings as the driver of value for this business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Atul at ₹8,502 per share, while the most bearish prices it at ₹5,191. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Atul's past performance and to peers in the same industry. It's clear from the latest estimates that Atul's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 5.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Atul is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Atul. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Atul's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Atul going out to 2029, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Atul that you should be aware of.
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