Earnings Beat: Arvind Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a mediocre week for Arvind Limited (NSE:ARVIND) shareholders, with the stock dropping 11% to ₹335 in the week since its latest quarterly results. The result was positive overall - although revenues of ₹21b were in line with what the analysts predicted, Arvind surprised by delivering a statutory profit of ₹3.95 per share, modestly greater than expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Arvind

After the latest results, the five analysts covering Arvind are now predicting revenues of ₹96.1b in 2026. If met, this would reflect a meaningful 17% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 73% to ₹20.10. Before this earnings report, the analysts had been forecasting revenues of ₹99.2b and earnings per share (EPS) of ₹21.75 in 2026. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

The analysts made no major changes to their price target of ₹451, suggesting the downgrades are not expected to have a long-term impact on Arvind's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Arvind analyst has a price target of ₹470 per share, while the most pessimistic values it at ₹417. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. The analysts are definitely expecting Arvind's growth to accelerate, with the forecast 14% annualised growth to the end of 2026 ranking favourably alongside historical growth of 6.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Arvind is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Arvind. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at ₹451, 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 Arvind. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Arvind analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Arvind that you should be aware of.

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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.