Bearish: Analysts Just Cut Their Aditya Birla Fashion and Retail Limited (NSE:ABFRL) Revenue and EPS estimates

The latest analyst coverage could presage a bad day for Aditya Birla Fashion and Retail Limited (NSE:ABFRL), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

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After this downgrade, Aditya Birla Fashion and Retail's ten analysts are now forecasting revenues of ₹84b in 2026. This would be a solid 14% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 15% per share from last year to ₹4.09 per share. However, before this estimates update, the consensus had been expecting revenues of ₹170b and ₹1.30 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

See our latest analysis for Aditya Birla Fashion and Retail

The consensus price target fell 31% to ₹195, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Aditya Birla Fashion and Retail's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 14% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 21% 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 note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Aditya Birla Fashion and Retail. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Aditya Birla Fashion and Retail's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Aditya Birla Fashion and Retail.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Aditya Birla Fashion and Retail analysts - going out to 2028, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.