Welspun Living Limited Just Reported A Surprise Profit And Analysts Updated Their Estimates

Investors in Welspun Living Limited (NSE:WELSPUNLIV) had a good week, as its shares rose 6.8% to close at ₹138 following the release of its second-quarter results. Although revenues of ₹24b were in line with analyst expectations, Welspun Living surprised on the earnings front, with an unexpected (statutory) profit of ₹0.13 per share a nice improvement on the losses that the analystsforecast. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following the recent earnings report, the consensus from nine analysts covering Welspun Living is for revenues of ₹95.4b in 2026. This implies a perceptible 2.3% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to plummet 36% to ₹2.34 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹106.1b and earnings per share (EPS) of ₹6.53 in 2026. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Welspun Living

The analysts made no major changes to their price target of ₹157, suggesting the downgrades are not expected to have a long-term impact on Welspun Living's valuation. 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. The most optimistic Welspun Living analyst has a price target of ₹192 per share, while the most pessimistic values it at ₹125. 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 Welspun Living shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.5% by the end of 2026. This indicates a significant reduction from annual growth of 7.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 13% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Welspun Living is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Welspun Living. 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. The consensus price target held steady at ₹157, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Welspun Living analysts - going out to 2028, and you can see them free on our platform here.

You still need to take note of risks, for example - Welspun Living has 2 warning signs we think 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.