Sapphire Foods India Limited Just Missed Earnings - But Analysts Have Updated Their Models

Investors in Sapphire Foods India Limited (NSE:SAPPHIRE) had a good week, as its shares rose 7.3% to close at ₹1,695 following the release of its quarterly results. It looks like a pretty bad result, all things considered. Although revenues of ₹7.2b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 46% to hit ₹1.32 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sapphire Foods India after the latest results.

See our latest analysis for Sapphire Foods India

Taking into account the latest results, the consensus forecast from Sapphire Foods India's 20 analysts is for revenues of ₹30.0b in 2025. This reflects a meaningful 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 116% to ₹12.35. In the lead-up to this report, the analysts had been modelling revenues of ₹30.3b and earnings per share (EPS) of ₹14.69 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹1,756, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. The most optimistic Sapphire Foods India analyst has a price target of ₹1,972 per share, while the most pessimistic values it at ₹1,353. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Sapphire Foods India's growth to accelerate, with the forecast 17% annualised growth to the end of 2025 ranking favourably alongside historical growth of 12% per annum over the past year. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Sapphire Foods India 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 the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at ₹1,756, 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 forecasts for Sapphire Foods India going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Sapphire Foods India (1 shouldn't be ignored!) that you need to be mindful of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com