The Mahindra Lifespace Developers Limited (NSE:MAHLIFE) Analysts Have Been Trimming Their Sales Forecasts

The analysts covering Mahindra Lifespace Developers Limited (NSE:MAHLIFE) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After this downgrade, Mahindra Lifespace Developers' six analysts are now forecasting revenues of ₹5.9b in 2025. This would be a substantial 177% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 40% to ₹8.87. Prior to this update, the analysts had been forecasting revenues of ₹9.0b and earnings per share (EPS) of ₹9.80 in 2025. It looks like analyst sentiment has fallen somewhat in this update, with a sizeable cut to revenue estimates and a small dip in earnings per share numbers as well.

See our latest analysis for Mahindra Lifespace Developers

Despite the cuts to forecast earnings, there was no real change to the ₹684 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

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. One thing stands out from these estimates, which is that Mahindra Lifespace Developers is forecast to grow faster in the future than it has in the past, with revenues expected to display 177% annualised growth until the end of 2025. If achieved, this would be a much better result than the 7.2% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 23% annually. Not only are Mahindra Lifespace Developers' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Mahindra Lifespace Developers after today.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Mahindra Lifespace Developers' financials, such as concerns around earnings quality. Learn more, and discover the 1 other warning sign we've identified, for free on our 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.