Earnings Miss: Divi's Laboratories Limited Missed EPS By 9.1% And Analysts Are Revising Their Forecasts

The quarterly results for Divi's Laboratories Limited (NSE:DIVISLAB) were released last week, making it a good time to revisit its performance. It looks like the results were a bit of a negative overall. While revenues of ₹21b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 9.1% to hit ₹16.20 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Divi's Laboratories

Following the latest results, Divi's Laboratories' 26 analysts are now forecasting revenues of ₹90.7b in 2025. This would be a solid 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 23% to ₹77.32. In the lead-up to this report, the analysts had been modelling revenues of ₹90.7b and earnings per share (EPS) of ₹78.11 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 10% to ₹4,332despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Divi's Laboratories' earnings by assigning a price premium. 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. Currently, the most bullish analyst values Divi's Laboratories at ₹5,740 per share, while the most bearish prices it at ₹2,644. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. It's clear from the latest estimates that Divi's Laboratories' rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 8.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Divi's Laboratories is expected to grow at about the same rate as 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Divi's Laboratories going out to 2027, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Divi's Laboratories , and understanding these should be part of your investment process.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com