Alkem Laboratories Limited Recorded A 5.4% Miss On Revenue: Analysts Are Revisiting Their Models

Alkem Laboratories Limited (NSE:ALKEM) shareholders are probably feeling a little disappointed, since its shares fell 3.2% to ₹5,525 in the week after its latest second-quarter results. Results look mixed - while revenue fell marginally short of analyst estimates at ₹34b, statutory earnings beat expectations 4.9%, with Alkem Laboratories reporting profits of ₹58.72 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Alkem Laboratories

Following the latest results, Alkem Laboratories' 22 analysts are now forecasting revenues of ₹133.6b in 2025. This would be a credible 4.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 5.3% to ₹187. In the lead-up to this report, the analysts had been modelling revenues of ₹137.4b and earnings per share (EPS) of ₹185 in 2025. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The average price target was steady at ₹5,764even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Alkem Laboratories at ₹7,225 per share, while the most bearish prices it at ₹4,330. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Alkem Laboratories' revenue growth is expected to slow, with the forecast 8.4% annualised growth rate until the end of 2025 being well below the historical 10% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% annually. Factoring in the forecast slowdown in growth, it seems obvious that Alkem Laboratories is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings 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 in mind, we wouldn't be too quick to come to a conclusion on Alkem Laboratories. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Alkem Laboratories going out to 2027, 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.