Hikal Limited (NSE:HIKAL) Analysts Are Pretty Bullish On The Stock After Recent Results

Investors in Hikal Limited (NSE:HIKAL) had a good week, as its shares rose 5.8% to close at ₹404 following the release of its second-quarter results. Results look mixed - while revenue fell marginally short of analyst estimates at ₹4.5b, statutory earnings were in line with expectations, at ₹5.64 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Hikal

Taking into account the latest results, the most recent consensus for Hikal from two analysts is for revenues of ₹19.5b in 2025. If met, it would imply a credible 7.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 12% to ₹6.70. Before this earnings report, the analysts had been forecasting revenues of ₹19.8b and earnings per share (EPS) of ₹9.25 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 9.4% to ₹435, suggesting the revised estimates are not indicative of a weaker long-term future for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Hikal's 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 4.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Hikal to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Hikal (including 1 which can't be ignored) .

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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.