Earnings Beat: Akums Drugs and Pharmaceuticals Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
Shareholders of Akums Drugs and Pharmaceuticals Limited (NSE:AKUMS) will be pleased this week, given that the stock price is up 14% to ₹761 following its latest quarterly results. The result was positive overall - although revenues of ₹12b were in line with what the analysts predicted, Akums Drugs and Pharmaceuticals surprised by delivering a statutory profit of ₹6.53 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Akums Drugs and Pharmaceuticals' three analysts is for revenues of ₹49.5b in 2027. This reflects a decent 9.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 44% to ₹27.35. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹48.9b and earnings per share (EPS) of ₹23.45 in 2027. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the solid gain to earnings per share expectations following these results.
Check out our latest analysis for Akums Drugs and Pharmaceuticals
The consensus price target rose 13% to ₹780, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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 Akums Drugs and Pharmaceuticals at ₹880 per share, while the most bearish prices it at ₹610. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Akums Drugs and Pharmaceuticals' past performance and to peers in the same industry. It's clear from the latest estimates that Akums Drugs and Pharmaceuticals' rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 3.5% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. So it's clear that despite the acceleration in growth, Akums Drugs and Pharmaceuticals is expected to grow meaningfully slower than the industry average.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Akums Drugs and Pharmaceuticals' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Akums Drugs and Pharmaceuticals. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Akums Drugs and Pharmaceuticals going out to 2029, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.