Alkem Laboratories Limited Just Recorded A 6.4% Revenue Beat: Here's What Analysts Think

Alkem Laboratories Limited (NSE:ALKEM) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat expectations with revenues of ₹40b arriving 6.4% ahead of forecasts. Statutory earnings per share (EPS) were ₹63.99, 4.6% ahead of estimates. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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After the latest results, the 21 analysts covering Alkem Laboratories are now predicting revenues of ₹145.8b in 2026. If met, this would reflect a credible 5.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 2.3% to ₹202. In the lead-up to this report, the analysts had been modelling revenues of ₹142.5b and earnings per share (EPS) of ₹201 in 2026. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small lift in to revenue forecasts.

View our latest analysis for Alkem Laboratories

The analysts increased their price target 5.3% to ₹5,859, perhaps signalling that higher revenues are a strong leading indicator for Alkem Laboratories's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Alkem Laboratories, with the most bullish analyst valuing it at ₹6,862 and the most bearish at ₹4,410 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Alkem Laboratories'historical trends, as the 10% annualised revenue growth to the end of 2026 is roughly in line with the 9.0% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 11% per year. So although Alkem Laboratories 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 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. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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.

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 estimates - from multiple Alkem Laboratories analysts - going out to 2028, and you can see them free on our platform here.

Even so, be aware that Alkem Laboratories is showing 1 warning sign in our investment analysis , 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.