Aditya Birla Fashion and Retail Limited (NSE:ABFRL) Just Reported Second-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Aditya Birla Fashion and Retail Limited (NSE:ABFRL) last week reported its latest second-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. The statutory results were mixed overall, with revenues of ₹36b in line with analyst forecasts, but losses of ₹1.81 per share, some 2.3% larger than the analysts were predicting. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Aditya Birla Fashion and Retail

Taking into account the latest results, the consensus forecast from Aditya Birla Fashion and Retail's 19 analysts is for revenues of ₹155.5b in 2025. This reflects a satisfactory 6.2% improvement in revenue compared to the last 12 months. Losses are expected to hold steady at around ₹6.14. Yet prior to the latest earnings, the analysts had been forecasting revenues of ₹160.5b and losses of ₹3.45 per share in 2025. So it's pretty clear the analysts have mixed opinions on Aditya Birla Fashion and Retail after this update; revenues were downgraded and per-share losses expected to increase.

The average price target was broadly unchanged at ₹306, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. 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 Aditya Birla Fashion and Retail, with the most bullish analyst valuing it at ₹385 and the most bearish at ₹225 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Aditya Birla Fashion and Retail's revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2025 being well below the historical 18% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 24% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Aditya Birla Fashion and Retail.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at ₹306, 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. At Simply Wall St, we have a full range of analyst estimates for Aditya Birla Fashion and Retail going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Aditya Birla Fashion and Retail that we have uncovered.

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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.