Narayana Hrudayalaya Limited (NSE:NH) shareholders are probably feeling a little disappointed, since its shares fell 7.4% to ₹1,919 in the week after its latest first-quarter results. Revenues were in line with forecasts, at ₹27b, although statutory earnings per share came in 16% below what the analysts expected, at ₹10.20 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Narayana Hrudayalaya after the latest results.
Taking into account the latest results, the current consensus from Narayana Hrudayalaya's 13 analysts is for revenues of ₹109.0b in 2027. This would reflect a substantial 20% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 28% to ₹51.70. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹107.8b and earnings per share (EPS) of ₹56.78 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
View our latest analysis for Narayana Hrudayalaya
It might be a surprise to learn that the consensus price target was broadly unchanged at ₹2,187, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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. Currently, the most bullish analyst values Narayana Hrudayalaya at ₹2,559 per share, while the most bearish prices it at ₹1,700. 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.
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 Narayana Hrudayalaya's rate of growth is expected to accelerate meaningfully, with the forecast 28% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 17% 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 18% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Narayana Hrudayalaya to grow faster than the wider industry.
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 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. The consensus price target held steady at ₹2,187, 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. At Simply Wall St, we have a full range of analyst estimates for Narayana Hrudayalaya 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 2 warning signs with Narayana Hrudayalaya , and understanding these should be part of your investment process.
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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.