It's been a good week for Biocon Limited (NSE:BIOCON) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.8% to ₹365. Results look mixed - while revenue fell marginally short of analyst estimates at ₹44b, statutory earnings were in line with expectations, at ₹2.82 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Biocon's 14 analysts is for revenues of ₹190.8b in 2027. This reflects a solid 10% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 55% to ₹4.29. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹194.0b and earnings per share (EPS) of ₹6.71 in 2027. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.
Check out our latest analysis for Biocon
The consensus price target held steady at ₹437, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Biocon analyst has a price target of ₹534 per share, while the most pessimistic values it at ₹326. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. The analysts are definitely expecting Biocon's growth to accelerate, with the forecast 21% annualised growth to the end of 2027 ranking favourably alongside historical growth of 16% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 20% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Biocon is expected to grow at about the same rate as 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Biocon going out to 2029, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 2 warning signs for Biocon that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.