These Analysts Just Made A Notable Downgrade To Their Tatva Chintan Pharma Chem Limited (NSE:TATVA) EPS Forecasts

Market forces rained on the parade of Tatva Chintan Pharma Chem Limited (NSE:TATVA) shareholders today, when the analysts downgraded their forecasts for next year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the current consensus from Tatva Chintan Pharma Chem's three analysts is for revenues of ₹6.5b in 2025 which - if met - would reflect a substantial 55% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 138% to ₹38.33. Prior to this update, the analysts had been forecasting revenues of ₹7.4b and earnings per share (EPS) of ₹51.05 in 2025. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Tatva Chintan Pharma Chem

Despite the cuts to forecast earnings, there was no real change to the ₹1,674 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Tatva Chintan Pharma Chem's growth to accelerate, with the forecast 42% annualised growth to the end of 2025 ranking favourably alongside historical growth of 13% per annum 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 12% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Tatva Chintan Pharma Chem is expected to grow much faster than its industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Tatva Chintan Pharma Chem. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected next year, we wouldn't be surprised if investors were a bit wary of Tatva Chintan Pharma Chem.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Tatva Chintan Pharma Chem analysts - going out to 2026, and you can see them free on our platform here.

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