Dhanuka Agritech Limited Recorded A 7.9% Miss On Revenue: Analysts Are Revisiting Their Models

It's been a good week for Dhanuka Agritech Limited (NSE:DHANUKA) shareholders, because the company has just released its latest second-quarter results, and the shares gained 2.1% to ₹1,601. Results look mixed - while revenue fell marginally short of analyst estimates at ₹6.5b, statutory earnings were in line with expectations, at ₹52.46 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Dhanuka Agritech

Taking into account the latest results, the most recent consensus for Dhanuka Agritech from eight analysts is for revenues of ₹20.5b in 2025. If met, it would imply a reasonable 6.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 7.3% to ₹64.45. Before this earnings report, the analysts had been forecasting revenues of ₹21.1b and earnings per share (EPS) of ₹62.52 in 2025. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

The consensus has made no major changes to the price target of ₹1,850, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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 Dhanuka Agritech, with the most bullish analyst valuing it at ₹2,138 and the most bearish at ₹1,357 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Dhanuka Agritech's growth to accelerate, with the forecast 14% annualised growth to the end of 2025 ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Dhanuka Agritech is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Dhanuka Agritech's earnings potential next year. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Even so, earnings per share are more important to the intrinsic value of the business. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Dhanuka Agritech going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Dhanuka Agritech has 1 warning sign we think you should be aware of.

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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.