Revenue Beat: Aarti Industries Limited Beat Analyst Estimates By 47%
As you might know, Aarti Industries Limited (NSE:AARTIIND) just kicked off its latest quarterly results with some very strong numbers. Statutory revenue of ₹37b and earnings of ₹4.65 both blasted past expectations, beating expectations by 47% and 37%, respectively, ahead of expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Aarti Industries after the latest results.
After the latest results, the 24 analysts covering Aarti Industries are now predicting revenues of ₹109.3b in 2027. If met, this would reflect a reasonable 3.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to reduce 6.8% to ₹15.24 in the same period. In the lead-up to this report, the analysts had been modelling revenues of ₹98.0b and earnings per share (EPS) of ₹14.30 in 2027. Sentiment certainly seems to have improved after the latest results, with a solid increase in revenue and a modest lift to earnings per share estimates.
See our latest analysis for Aarti Industries
Despite these upgrades,the analysts have not made any major changes to their price target of ₹535, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Aarti Industries at ₹647 per share, while the most bearish prices it at ₹470. 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 Aarti Industries shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 7.0% growth on an annualised basis. That is in line with its 7.3% 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 12% per year. So it's pretty clear that Aarti Industries is expected to grow slower than similar companies in the same 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 Aarti Industries following these results. They also upgraded their revenue estimates for next year, even though it is expected to grow slower 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.
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 Aarti Industries going out to 2029, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Aarti Industries you should know about.
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