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Results: Godrej Agrovet Limited Exceeded Expectations And The Consensus Has Updated Its Estimates
It's been a good week for Godrej Agrovet Limited (NSE:GODREJAGRO) shareholders, because the company has just released its latest interim results, and the shares gained 6.1% to ₹592. Godrej Agrovet reported ₹30b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of ₹12.98 beat expectations, being 10.0% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the five analysts covering Godrej Agrovet are now predicting revenues of ₹114.9b in 2027. If met, this would reflect a satisfactory 5.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to reduce 2.5% to ₹23.80 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹113.0b and earnings per share (EPS) of ₹28.00 in 2027. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.
See our latest analysis for Godrej Agrovet
The consensus price target held steady at ₹799, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Godrej Agrovet, with the most bullish analyst valuing it at ₹1,000 and the most bearish at ₹710 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 Godrej Agrovet shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Godrej Agrovet's past performance and to peers in the same industry. It's clear from the latest estimates that Godrej Agrovet's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 5.1% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 11% per year. Godrej Agrovet 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Godrej Agrovet analysts - going out to 2029, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Godrej Agrovet that you should be aware of.
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