Arvind Fashions Limited Just Missed Earnings - But Analysts Have Updated Their Models
Shareholders might have noticed that Arvind Fashions Limited (NSE:ARVINDFASN) filed its quarterly result this time last week. The early response was not positive, with shares down 3.6% to ₹352 in the past week. Statutory earnings per share fell badly short of expectations, coming in at ₹3.62, some 34% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at ₹16b. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Arvind Fashions from eight analysts is for revenues of ₹59.7b in 2027. If met, it would imply a reasonable 7.4% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 28% to ₹12.62. In the lead-up to this report, the analysts had been modelling revenues of ₹59.7b and earnings per share (EPS) of ₹12.40 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
See our latest analysis for Arvind Fashions
There were no changes to revenue or earnings estimates or the price target of ₹631, suggesting that the company has met expectations in its recent result. 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 Arvind Fashions at ₹784 per share, while the most bearish prices it at ₹400. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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 analysts are definitely expecting Arvind Fashions' growth to accelerate, with the forecast 15% annualised growth to the end of 2027 ranking favourably alongside historical growth of 10% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Arvind Fashions is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at ₹631, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Arvind Fashions 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 Arvind Fashions you should know about.
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