Arvind Limited (NSE:ARVIND) Released Earnings Last Week And Analysts Lifted Their Price Target To ₹395

Last week, you might have seen that Arvind Limited (NSE:ARVIND) released its quarterly result to the market. The early response was not positive, with shares down 2.3% to ₹307 in the past week. Revenues came in 5.0% below expectations, at ₹19b. Statutory earnings per share were relatively better off, with a per-share profit of ₹15.49 being roughly in line with analyst estimates. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Arvind

Taking into account the latest results, the current consensus from Arvind's six analysts is for revenues of ₹92.3b in 2025. This would reflect a substantial 22% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 37% to ₹19.70. Before this earnings report, the analysts had been forecasting revenues of ₹98.1b and earnings per share (EPS) of ₹20.02 in 2025. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The analysts have also increased their price target 41% to ₹395, clearly signalling that lower revenue forecasts next year are not expected to have a material impact on Arvind's valuation. 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. The most optimistic Arvind analyst has a price target of ₹502 per share, while the most pessimistic values it at ₹350. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Arvind's growth to accelerate, with the forecast 18% annualised growth to the end of 2025 ranking favourably alongside historical growth of 1.5% per annum 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. Factoring in the forecast acceleration in revenue, it's pretty clear that Arvind is expected to grow much faster than its industry.

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. They also downgraded Arvind's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 Arvind going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Arvind that you need to take into consideration.

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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.