Arvind Limited Just Missed Earnings - But Analysts Have Updated Their Models

Investors in Arvind Limited (NSE:ARVIND) had a good week, as its shares rose 5.9% to close at ₹359 following the release of its second-quarter results. Statutory earnings per share disappointed, coming in -22% short of expectations, at ₹2.28. Fortunately revenue performance was a lot stronger at ₹22b arriving 11% ahead of predictions. 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.

See our latest analysis for Arvind

Taking into account the latest results, the most recent consensus for Arvind from five analysts is for revenues of ₹83.4b in 2025. If met, it would imply an okay 4.5% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 24% to ₹13.68. Before this earnings report, the analysts had been forecasting revenues of ₹85.0b and earnings per share (EPS) of ₹17.00 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

The consensus price target held steady at ₹492, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Arvind, with the most bullish analyst valuing it at ₹542 and the most bearish at ₹442 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Arvind is an easy business to forecast or the the analysts are all using similar assumptions.

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. It's clear from the latest estimates that Arvind's rate of growth is expected to accelerate meaningfully, with the forecast 9.3% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 5.4% 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 14% per year. So it's clear that despite the acceleration in growth, Arvind is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Arvind. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Arvind. Long-term earnings power is much more important than next year's profits. We have forecasts for Arvind going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Arvind has 1 warning sign we think you should be aware of.

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.