Rupa & Company Limited Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Rupa & Company Limited (NSE:RUPA) shareholders are probably feeling a little disappointed, since its shares fell 5.3% to ₹252 in the week after its latest second-quarter results. Revenues came in 8.2% below expectations, at ₹3.0b. Statutory earnings per share were relatively better off, with a per-share profit of ₹8.77 being roughly in line with analyst estimates. Following the result, the analyst has 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Rupa after the latest results.

Check out our latest analysis for Rupa

After the latest results, the sole analyst covering Rupa are now predicting revenues of ₹12.8b in 2025. If met, this would reflect an okay 4.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 7.6% to ₹10.00. Yet prior to the latest earnings, the analyst had been anticipated revenues of ₹14.2b and earnings per share (EPS) of ₹13.30 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The consensus price target fell 9.9% to ₹300, with the weaker earnings outlook clearly leading valuation estimates.

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 Rupa's rate of growth is expected to accelerate meaningfully, with the forecast 8.8% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 1.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 15% annually. So it's clear that despite the acceleration in growth, Rupa is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Rupa. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.

You can also see whether Rupa is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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.