Earnings Miss: Vardhman Textiles Limited Missed EPS By 16% And Analysts Are Revising Their Forecasts

It's been a sad week for Vardhman Textiles Limited (NSE:VTL), who've watched their investment drop 11% to ₹441 in the week since the company reported its quarterly result. Revenues were in line with forecasts, at ₹25b, although statutory earnings per share came in 16% below what the analysts expected, at ₹7.40 per share. 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. 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 Vardhman Textiles

After the latest results, the four analysts covering Vardhman Textiles are now predicting revenues of ₹106.5b in 2026. If met, this would reflect a notable 9.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 16% to ₹34.00. Before this earnings report, the analysts had been forecasting revenues of ₹108.8b and earnings per share (EPS) of ₹37.40 in 2026. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the ₹508 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Vardhman Textiles analyst has a price target of ₹561 per share, while the most pessimistic values it at ₹394. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Vardhman Textiles shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Vardhman Textiles' past performance and to peers in the same industry. We would highlight that Vardhman Textiles' revenue growth is expected to slow, with the forecast 7.4% annualised growth rate until the end of 2026 being well below the historical 10% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 15% per year. Factoring in the forecast slowdown in growth, it seems obvious that Vardhman Textiles is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Vardhman Textiles. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Vardhman Textiles analysts - going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Vardhman Textiles 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.