Aditya Birla Fashion and Retail Limited Just Beat EPS By 81%: Here's What Analysts Think Will Happen Next

Aditya Birla Fashion and Retail Limited (NSE:ABFRL) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat both earnings and revenue forecasts, with revenue of ₹29b, some 3.2% above estimates, and statutory earnings per share (EPS) coming in at ₹1.04, 81% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Aditya Birla Fashion and Retail

Taking into account the latest results, the most recent consensus for Aditya Birla Fashion and Retail from 16 analysts is for revenues of ₹117.6b in 2023 which, if met, would be a solid 15% increase on its sales over the past 12 months. Statutory earnings per share are forecast to reduce 6.2% to ₹3.36 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹114.4b and earnings per share (EPS) of ₹3.47 in 2023. So it's pretty clear consensus is mixed on Aditya Birla Fashion and Retail after the latest results; whilethe analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.

The consensus price target was unchanged at ₹345, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. 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 Aditya Birla Fashion and Retail at ₹370 per share, while the most bearish prices it at ₹206. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Aditya Birla Fashion and Retail's rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 0.4% p.a. 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 15% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Aditya Birla Fashion and Retail to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at ₹345, 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 Aditya Birla Fashion and Retail. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Aditya Birla Fashion and Retail going out to 2025, 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 Aditya Birla Fashion and Retail (1 is a bit concerning!) that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.