Biocon Limited Just Missed Earnings - But Analysts Have Updated Their Models

There's been a notable change in appetite for Biocon Limited (NSE:BIOCON) shares in the week since its quarterly report, with the stock down 10% to ₹343. Statutory earnings per share fell badly short of expectations, coming in at ₹0.26, some 51% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at ₹39b. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the consensus forecast from Biocon's 16 analysts is for revenues of ₹175.1b in 2026. This reflects a notable 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 54% to ₹4.45. In the lead-up to this report, the analysts had been modelling revenues of ₹176.4b and earnings per share (EPS) of ₹6.30 in 2026. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

See our latest analysis for Biocon

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹383, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Biocon, with the most bullish analyst valuing it at ₹465 and the most bearish at ₹270 per share. 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 Biocon shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Biocon's revenue growth is expected to slow, with the forecast 15% annualised growth rate until the end of 2026 being well below the historical 20% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 23% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Biocon.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Biocon. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Biocon's revenue is expected to perform worse than the wider industry. The consensus price target held steady at ₹383, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Biocon. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Biocon analysts - going out to 2028, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Biocon (1 is a bit unpleasant) you should be aware of.

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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.