Dr. Reddy's Laboratories Limited (NSE:DRREDDY) Exceeded Expectations And The Analyst Consensus Has Been Reviewing Its Models

Dr. Reddy's Laboratories Limited (NSE:DRREDDY) just released its latest first-quarter results and things are looking bullish. The company beat expectations with revenues of ₹77b arriving 5.5% ahead of forecasts. Statutory earnings per share (EPS) were ₹83.46, 5.5% ahead of estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Dr. Reddy's Laboratories

Following the latest results, Dr. Reddy's Laboratories' 34 analysts are now forecasting revenues of ₹313.1b in 2025. This would be a meaningful 8.5% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be ₹339, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of ₹302.4b and earnings per share (EPS) of ₹332 in 2025. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.0% to ₹6,534per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Dr. Reddy's Laboratories, with the most bullish analyst valuing it at ₹8,012 and the most bearish at ₹4,706 per share. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Dr. Reddy's Laboratories'historical trends, as the 12% annualised revenue growth to the end of 2025 is roughly in line with the 12% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 10% annually. So although Dr. Reddy's 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 biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Dr. Reddy's Laboratories' earnings potential next year. 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. 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.

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. At Simply Wall St, we have a full range of analyst estimates for Dr. Reddy's Laboratories going out to 2027, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for Dr. Reddy's Laboratories 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.

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