Investors in DLF Limited (NSE:DLF) had a good week, as its shares rose 3.5% to close at ₹673 following the release of its quarterly results. It was a curious result overall, with revenues coming in an incredible 28% below what the analysts had expected, at ₹13b. Statutory earnings per share beat analyst models by 29% to hit ₹5.25. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on DLF after the latest results.
Taking into account the latest results, the consensus forecast from DLF's 20 analysts is for revenues of ₹93.0b in 2027. This reflects a major 46% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 6.3% to ₹19.62. In the lead-up to this report, the analysts had been modelling revenues of ₹98.7b and earnings per share (EPS) of ₹20.18 in 2027. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
See our latest analysis for DLF
Despite the cuts to forecast earnings, there was no real change to the ₹819 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 DLF analyst has a price target of ₹1,000 per share, while the most pessimistic values it at ₹676. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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 clear from the latest estimates that DLF's rate of growth is expected to accelerate meaningfully, with the forecast 113% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 8.5% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 25% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that DLF 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 DLF. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at ₹819, 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 forecasts for DLF going out to 2029, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for DLF you should know about.
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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.