Stock Analysis

Results: Alembic Pharmaceuticals Limited Exceeded Expectations And The Consensus Has Updated Its Estimates

Source: Shutterstock

Alembic Pharmaceuticals Limited (NSE:APLLTD) last week reported its latest third-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like a credible result overall - although revenues of ₹16b were what the analysts expected, Alembic Pharmaceuticals surprised by delivering a (statutory) profit of ₹9.18 per share, an impressive 75% above what was forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Alembic Pharmaceuticals

NSEI:APLLTD Earnings and Revenue Growth February 8th 2024

Taking into account the latest results, the most recent consensus for Alembic Pharmaceuticals from 13 analysts is for revenues of ₹70.4b in 2025. If met, it would imply a decent 15% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 19% to ₹35.84. Before this earnings report, the analysts had been forecasting revenues of ₹70.5b and earnings per share (EPS) of ₹34.62 in 2025. So the consensus seems to have become somewhat more optimistic on Alembic Pharmaceuticals' earnings potential following these results.

The consensus price target rose 9.3% to ₹841, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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 Alembic Pharmaceuticals analyst has a price target of ₹994 per share, while the most pessimistic values it at ₹515. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Alembic Pharmaceuticals shareholders.

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 Alembic Pharmaceuticals' growth to accelerate, with the forecast 12% annualised growth to the end of 2025 ranking favourably alongside historical growth of 8.1% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 11% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Alembic Pharmaceuticals is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Alembic Pharmaceuticals' earnings potential next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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 forecasts for Alembic Pharmaceuticals going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Alembic Pharmaceuticals that you should be aware of.

Valuation is complex, but we're helping make it simple.

Find out whether Alembic Pharmaceuticals is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at)

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.