Vedant Fashions Limited (NSE:MANYAVAR) Released Earnings Last Week And Analysts Lifted Their Price Target To ₹1,223

As you might know, Vedant Fashions Limited (NSE:MANYAVAR) recently reported its first-quarter numbers. Results were roughly in line with estimates, with revenues of ₹3.2b and statutory earnings per share of ₹4.16. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Vedant Fashions

After the latest results, the five analysts covering Vedant Fashions are now predicting revenues of ₹13.6b in 2023. If met, this would reflect a meaningful 14% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to rise 7.9% to ₹16.48. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹13.4b and earnings per share (EPS) of ₹16.10 in 2023. So the consensus seems to have become somewhat more optimistic on Vedant Fashions' earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 7.4% to ₹1,223. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Vedant Fashions, with the most bullish analyst valuing it at ₹1,200 and the most bearish at ₹1,075 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Vedant Fashions' past performance and to peers in the same industry. We would highlight that Vedant Fashions' revenue growth is expected to slow, with the forecast 19% annualised growth rate until the end of 2023 being well below the historical 73% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 15% annually. So it's pretty clear that, while Vedant Fashions' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Vedant Fashions following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Vedant Fashions. Long-term earnings power is much more important than next year's profits. We have forecasts for Vedant Fashions going out to 2025, and you can see them free on our platform here.

Even so, be aware that Vedant Fashions is showing 1 warning sign in our investment analysis , you should know about...

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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.