Adani Enterprises Limited Just Missed EPS By 22%: Here's What Analysts Think Will Happen Next
Investors in Adani Enterprises Limited (NSE:ADANIENT) had a good week, as its shares rose 4.1% to close at ₹2,579 following the release of its half-yearly results. Results overall were not great, with earnings of ₹2.50 per share falling drastically short of analyst expectations. Meanwhile revenues hit ₹701b and were slightly better than forecasts. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Adani Enterprises from three analysts is for revenues of ₹1.45t in 2027. If met, it would imply a meaningful 14% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to plunge 23% to ₹30.64 in the same period. In the lead-up to this report, the analysts had been modelling revenues of ₹1.43t and earnings per share (EPS) of ₹49.51 in 2027. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.
Check out our latest analysis for Adani Enterprises
It might be a surprise to learn that the consensus price target was broadly unchanged at ₹3,562, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Adani Enterprises at ₹3,882 per share, while the most bearish prices it at ₹3,256. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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. The analysts are definitely expecting Adani Enterprises' growth to accelerate, with the forecast 30% annualised growth to the end of 2027 ranking favourably alongside historical growth of 5.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Adani Enterprises is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Adani Enterprises. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider 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 in mind, we wouldn't be too quick to come to a conclusion on Adani Enterprises. Long-term earnings power is much more important than next year's profits. We have forecasts for Adani Enterprises going out to 2029, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 4 warning signs for Adani Enterprises you should be aware of, and 2 of them are a bit concerning.
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