Aditya Birla Fashion and Retail Limited (NSE:ABFRL) First-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year
Last week, you might have seen that Aditya Birla Fashion and Retail Limited (NSE:ABFRL) released its quarterly result to the market. The early response was not positive, with shares down 2.2% to ₹61.04 in the past week. Revenues of ₹20b arrived in line with expectations, although statutory losses per share were ₹1.77, an impressive 41% smaller than what broker models predicted. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the most recent consensus for Aditya Birla Fashion and Retail from 13 analysts is for revenues of ₹93.5b in 2027. If met, it would imply a solid 12% increase on its revenue over the past 12 months. Losses are expected to be contained, narrowing 11% from last year to ₹5.69. Before this latest report, the consensus had been expecting revenues of ₹92.7b and ₹5.20 per share in losses. So it's pretty clear consensus is mixed on Aditya Birla Fashion and Retail after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a moderate increase in per-share loss expectations.
Check out our latest analysis for Aditya Birla Fashion and Retail
The consensus price target held steady at ₹70.47, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's 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. The most optimistic Aditya Birla Fashion and Retail analyst has a price target of ₹127 per share, while the most pessimistic values it at ₹54.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Aditya Birla Fashion and Retail's rate of growth is expected to accelerate meaningfully, with the forecast 16% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 0.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Aditya Birla Fashion and Retail is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. 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 ₹70.47, 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. We have forecasts for Aditya Birla Fashion and Retail going out to 2029, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Aditya Birla Fashion and Retail , and understanding this should be part of your investment process.
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