Vardhman Textiles Limited Just Missed Earnings - But Analysts Have Updated Their Models

It's shaping up to be a tough period for Vardhman Textiles Limited (NSE:VTL), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at ₹27b, statutory earnings missed forecasts by 14%, coming in at just ₹10.86 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the current consensus from Vardhman Textiles' seven analysts is for revenues of ₹112.9b in 2027. This would reflect a meaningful 11% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 39% to ₹40.73. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹112.7b and earnings per share (EPS) of ₹41.60 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

Check out our latest analysis for Vardhman Textiles

The consensus price target held steady at ₹595, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Vardhman Textiles, with the most bullish analyst valuing it at ₹700 and the most bearish at ₹424 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Vardhman Textiles shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Vardhman Textiles' past performance and to peers in the same industry. It's clear from the latest estimates that Vardhman Textiles' rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 2.3% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 13% per year. Vardhman Textiles 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 the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at ₹595, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Vardhman Textiles analysts - going out to 2029, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Vardhman Textiles 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.