Heritage Foods Limited Just Missed EPS By 22%: Here's What Analysts Think Will Happen Next

It's been a mediocre week for Heritage Foods Limited (NSE:HERITGFOOD) shareholders, with the stock dropping 15% to ₹537 in the week since its latest second-quarter results. Statutory earnings per share fell badly short of expectations, coming in at ₹5.24, some 22% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at ₹10b. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Heritage Foods

After the latest results, the four analysts covering Heritage Foods are now predicting revenues of ₹41.8b in 2025. If met, this would reflect a modest 5.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to grow 18% to ₹22.10. In the lead-up to this report, the analysts had been modelling revenues of ₹42.4b and earnings per share (EPS) of ₹22.03 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.

The analysts reconfirmed their price target of ₹669, showing that the business is executing well and in line with expectations. 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. Currently, the most bullish analyst values Heritage Foods at ₹724 per share, while the most bearish prices it at ₹625. This is a very narrow spread of estimates, implying either that Heritage Foods is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Heritage Foods' rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 9.6% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 11% per year. Heritage Foods is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Heritage Foods going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Heritage Foods 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.