Zydus Wellness Limited (NSE:ZYDUSWELL) Just Reported Earnings, And Analysts Cut Their Target Price

Shareholders might have noticed that Zydus Wellness Limited (NSE:ZYDUSWELL) filed its second-quarter result this time last week. The early response was not positive, with shares down 4.0% to ₹1,868 in the past week. Results overall were respectable, with statutory earnings of ₹41.94 per share roughly in line with what the analysts had forecast. Revenues of ₹4.9b came in 3.0% 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Zydus Wellness

Following the latest results, Zydus Wellness' six analysts are now forecasting revenues of ₹26.6b in 2025. This would be a modest 5.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 22% to ₹61.24. In the lead-up to this report, the analysts had been modelling revenues of ₹26.3b and earnings per share (EPS) of ₹63.28 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target fell 8.3% to ₹2,386, with the analysts clearly linking lower forecast earnings to the performance of the stock price. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Zydus Wellness analyst has a price target of ₹2,591 per share, while the most pessimistic values it at ₹1,942. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 clear from the latest estimates that Zydus Wellness' rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 8.8% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 11% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Zydus Wellness is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Zydus Wellness. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Zydus Wellness' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Zydus Wellness analysts - going out to 2027, 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 Zydus Wellness you should know about.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.