Avenue Supermarts Limited Just Missed Earnings - But Analysts Have Updated Their Models

It's been a mediocre week for Avenue Supermarts Limited (NSE:DMART) shareholders, with the stock dropping 11% to ₹3,507 in the week since its latest third-quarter results. Revenues were in line with forecasts, at ₹160b, although statutory earnings per share came in 15% below what the analysts expected, at ₹11.10 per share. 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.

Check out our latest analysis for Avenue Supermarts

Taking into account the latest results, the consensus forecast from Avenue Supermarts' 18 analysts is for revenues of ₹698.5b in 2026. This reflects a substantial 22% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 30% to ₹54.39. Before this earnings report, the analysts had been forecasting revenues of ₹703.1b and earnings per share (EPS) of ₹57.69 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target fell 5.4% to ₹4,188, with the analysts clearly linking lower forecast earnings to the performance of the stock price. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Avenue Supermarts at ₹5,800 per share, while the most bearish prices it at ₹3,250. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of Avenue Supermarts'historical trends, as the 17% annualised revenue growth to the end of 2026 is roughly in line with the 21% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.7% annually. So it's pretty clear that Avenue Supermarts is forecast to grow substantially faster than its industry.

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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 Avenue Supermarts analysts - going out to 2027, and you can see them free on our platform here.

It might also be worth considering whether Avenue Supermarts' debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.