Lupin Limited (NSE:LUPIN) Just Released Its First-Quarter Earnings: Here's What Analysts Think
Shareholders might have noticed that Lupin Limited (NSE:LUPIN) filed its quarterly result this time last week. The early response was not positive, with shares down 2.1% to ₹2,364 in the past week. Results overall were respectable, with statutory earnings of ₹30.89 per share roughly in line with what the analysts had forecast. Revenues of ₹83b came in 4.5% ahead of analyst predictions. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Lupin after the latest results.
Following last week's earnings report, Lupin's 32 analysts are forecasting 2027 revenues to be ₹304.6b, approximately in line with the last 12 months. Statutory earnings per share are forecast to plunge 22% to ₹94.90 in the same period. Before this earnings report, the analysts had been forecasting revenues of ₹298.3b and earnings per share (EPS) of ₹100 in 2027. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a to revenue, the consensus also made a minor downgrade to its earnings per share forecasts.
See our latest analysis for Lupin
The consensus price target was unchanged at ₹2,499, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. 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. Currently, the most bullish analyst values Lupin at ₹3,100 per share, while the most bearish prices it at ₹1,803. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. It's pretty clear that there is an expectation that Lupin's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 2.2% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. Factoring in the forecast slowdown in growth, it seems obvious that Lupin is also expected to grow slower than other industry participants.
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. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at ₹2,499, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Lupin. Long-term earnings power is much more important than next year's profits. We have forecasts for Lupin 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 2 warning signs for Lupin you should be aware of, and 1 of them is potentially serious.
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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.