Aditya Birla Fashion and Retail Limited (NSE:ABFRL) Just Reported And Analysts Have Been Lifting Their Price Targets

Last week, you might have seen that Aditya Birla Fashion and Retail Limited (NSE:ABFRL) released its first-quarter result to the market. The early response was not positive, with shares down 3.2% to ₹325 in the past week. Revenues of ₹34b came in a modest 3.2% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of ₹1.60 coming in a substantial 32% smaller than what the analysts had expected. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Aditya Birla Fashion and Retail

After the latest results, the 18 analysts covering Aditya Birla Fashion and Retail are now predicting revenues of ₹161.3b in 2025. If met, this would reflect a solid 13% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 48% to ₹3.31. Yet prior to the latest earnings, the analysts had been forecasting revenues of ₹162.9b and losses of ₹2.44 per share in 2025. While this year's revenue estimates held steady, there was also a sizeable expansion in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

Although the analysts are now forecasting higher losses, the average price target rose 6.3% to 281.04762, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. 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. There are some variant perceptions on Aditya Birla Fashion and Retail, with the most bullish analyst valuing it at ₹385 and the most bearish at ₹200 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We can infer from the latest estimates that forecasts expect a continuation of Aditya Birla Fashion and Retail'shistorical trends, as the 18% annualised revenue growth to the end of 2025 is roughly in line with the 16% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 20% per year. So although Aditya Birla Fashion and Retail is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Aditya Birla Fashion and Retail. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Aditya Birla Fashion and Retail. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Aditya Birla Fashion and Retail analysts - going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Aditya Birla Fashion and Retail you should know about.

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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.