Earnings Miss: Devyani International Limited Missed EPS By 81% And Analysts Are Revising Their Forecasts

Last week, you might have seen that Devyani International Limited (NSE:DEVYANI) released its yearly result to the market. The early response was not positive, with shares down 3.9% to ₹180 in the past week. It looks like a pretty bad result, all things considered. Although revenues of ₹50b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 81% to hit ₹0.08 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

We've discovered 3 warning signs about Devyani International. View them for free.

Taking into account the latest results, the consensus forecast from Devyani International's 22 analysts is for revenues of ₹57.8b in 2026. This reflects a meaningful 16% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 2,343% to ₹1.85. Before this earnings report, the analysts had been forecasting revenues of ₹58.7b and earnings per share (EPS) of ₹1.28 in 2026. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the massive increase in earnings per share expectations following these results.

View our latest analysis for Devyani International

The consensus price target was unchanged at ₹189, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. There are some variant perceptions on Devyani International, with the most bullish analyst valuing it at ₹226 and the most bearish at ₹139 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Devyani International's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 16% growth on an annualised basis. This is compared to a historical growth rate of 27% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 19% annually. Factoring in the forecast slowdown in growth, it looks like Devyani International is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Devyani International following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at ₹189, 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 Devyani International analysts - going out to 2028, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Devyani International (1 is a bit unpleasant!) 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.