Revenue Beat: Ajanta Pharma Limited Exceeded Revenue Forecasts By 5.3% And Analysts Are Updating Their Estimates

Last week saw the newest second-quarter earnings release from Ajanta Pharma Limited (NSE:AJANTPHARM), an important milestone in the company's journey to build a stronger business. It was a pretty mixed result, with revenues beating expectations to hit ₹12b. Statutory earnings fell 4.5% short of analyst forecasts, reaching ₹17.26 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Ajanta Pharma

Following the latest results, Ajanta Pharma's eleven analysts are now forecasting revenues of ₹47.3b in 2025. This would be a modest 5.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 7.9% to ₹75.57. Before this earnings report, the analysts had been forecasting revenues of ₹47.2b and earnings per share (EPS) of ₹77.78 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹2,966, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Ajanta Pharma analyst has a price target of ₹3,665 per share, while the most pessimistic values it at ₹1,981. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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 period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 11% growth on an annualised basis. That is in line with its 13% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 11% annually. So although Ajanta Pharma is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at ₹2,966, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Ajanta Pharma 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 2 warning signs for Ajanta Pharma 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.