Earnings Update: Here's Why Analysts Just Lifted Their Poly Medicure Limited (NSE:POLYMED) Price Target To ₹2,138

Poly Medicure Limited (NSE:POLYMED) shareholders are probably feeling a little disappointed, since its shares fell 3.8% to ₹1,995 in the week after its latest first-quarter results. Results look mixed - while revenue fell marginally short of analyst estimates at ₹3.8b, statutory earnings beat expectations 4.2%, with Poly Medicure reporting profits of ₹7.71 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Poly Medicure after the latest results.

View our latest analysis for Poly Medicure

Taking into account the latest results, the consensus forecast from Poly Medicure's five analysts is for revenues of ₹17.0b in 2025. This reflects a decent 18% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 25% to ₹35.10. In the lead-up to this report, the analysts had been modelling revenues of ₹17.0b and earnings per share (EPS) of ₹34.72 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 5.3% to ₹2,138. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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. There are some variant perceptions on Poly Medicure, with the most bullish analyst valuing it at ₹2,400 and the most bearish at ₹1,940 per share. This is a very narrow spread of estimates, implying either that Poly Medicure is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Poly Medicure's past performance and to peers in the same industry. It's clear from the latest estimates that Poly Medicure's rate of growth is expected to accelerate meaningfully, with the forecast 25% annualised revenue growth to the end of 2025 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 14% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Poly Medicure to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. 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. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Poly Medicure analysts - going out to 2027, and you can see them free on our platform here.

You can also see our analysis of Poly Medicure's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.

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