Earnings Miss: Welspun Living Limited Missed EPS By 8.3% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Welspun Living Limited (NSE:WELSPUNLIV) filed its second-quarter result this time last week. The early response was not positive, with shares down 4.6% to ₹152 in the past week. Revenues of ₹29b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at ₹2.09, missing estimates by 8.3%. 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 Welspun Living

Taking into account the latest results, the most recent consensus for Welspun Living from eight analysts is for revenues of ₹110.0b in 2025. If met, it would imply a modest 5.8% increase on its revenue over the past 12 months. Per-share earnings are expected to swell 17% to ₹8.62. Before this earnings report, the analysts had been forecasting revenues of ₹108.2b and earnings per share (EPS) of ₹8.73 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of ₹201, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Welspun Living at ₹215 per share, while the most bearish prices it at ₹185. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Welspun Living's growth to accelerate, with the forecast 12% annualised growth to the end of 2025 ranking favourably alongside historical growth of 8.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Welspun Living is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. 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 Welspun Living. Long-term earnings power is much more important than next year's profits. We have forecasts for Welspun Living going out to 2027, and you can see them free on our platform here.

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

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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.