Results: Vaibhav Global Limited Beat Earnings Expectations And Analysts Now Have New Forecasts

There's been a major selloff in Vaibhav Global Limited (NSE:VAIBHAVGBL) shares in the week since it released its full-year report, with the stock down 20% to ₹332. It looks like a credible result overall - although revenues of ₹28b were in line with what the analyst predicted, Vaibhav Global surprised by delivering a statutory profit of ₹14.24 per share, a notable 18% above expectations. 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 Vaibhav Global after the latest results.

See our latest analysis for Vaibhav Global

Following the latest results, Vaibhav Global's one analyst are now forecasting revenues of ₹29.6b in 2023. This would be a satisfactory 6.7% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to sink 20% to ₹11.60 in the same period. Before this earnings report, the analyst had been forecasting revenues of ₹31.4b and earnings per share (EPS) of ₹18.30 in 2023. The analyst seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share numbers.

It'll come as no surprise then, to learn that the analyst has cut their price target 16% to ₹782.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Vaibhav Global's past performance and to peers in the same industry. We would highlight that Vaibhav Global's revenue growth is expected to slow, with the forecast 6.7% annualised growth rate until the end of 2023 being well below the historical 14% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 17% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Vaibhav Global.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Vaibhav Global. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Vaibhav Global's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Vaibhav Global. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Vaibhav Global (1 can't be ignored) 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.