Revenue Miss: Dhanuka Agritech Limited Fell 7.7% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

It's been a sad week for Dhanuka Agritech Limited (NSE:DHANUKA), who've watched their investment drop 14% to ₹1,049 in the week since the company reported its third-quarter result. Results look mixed - while revenue fell marginally short of analyst estimates at ₹4.0b, statutory earnings were in line with expectations, at ₹50.35 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Dhanuka Agritech

Taking into account the latest results, the current consensus from Dhanuka Agritech's eight analysts is for revenues of ₹21.2b in 2025. This would reflect a sizeable 20% increase on its revenue over the past 12 months. Per-share earnings are expected to step up 14% to ₹61.51. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹21.6b and earnings per share (EPS) of ₹64.24 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The average price target climbed 8.5% to ₹1,166despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. 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 Dhanuka Agritech analyst has a price target of ₹1,308 per share, while the most pessimistic values it at ₹991. This is a very narrow spread of estimates, implying either that Dhanuka Agritech is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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 Dhanuka Agritech's rate of growth is expected to accelerate meaningfully, with the forecast 16% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 12% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Dhanuka Agritech to grow faster than 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 Dhanuka Agritech. They also downgraded Dhanuka Agritech's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Dhanuka Agritech. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Dhanuka Agritech analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Dhanuka Agritech you should know about.

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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.