Indoco Remedies Limited Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

It's been a mediocre week for Indoco Remedies Limited (NSE:INDOCO) shareholders, with the stock dropping 11% to ₹304 in the week since its latest second-quarter results. Revenues came in 6.7% below expectations, at ₹4.3b. Statutory earnings per share were relatively better off, with a per-share profit of ₹10.51 being roughly in line with analyst estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Indoco Remedies

Following last week's earnings report, Indoco Remedies' five analysts are forecasting 2025 revenues to be ₹17.5b, approximately in line with the last 12 months. Statutory earnings per share are expected to plunge 24% to ₹2.65 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹19.1b and earnings per share (EPS) of ₹11.78 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 9.7% to ₹312. 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. The most optimistic Indoco Remedies analyst has a price target of ₹338 per share, while the most pessimistic values it at ₹290. This is a very narrow spread of estimates, implying either that Indoco Remedies is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Indoco Remedies' past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 2.5% annualised decline to the end of 2025. That is a notable change from historical growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% per year. It's pretty clear that Indoco Remedies' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Indoco Remedies. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Indoco Remedies' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Indoco Remedies analysts - going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 4 warning signs for Indoco Remedies (of which 2 can't be ignored!) you should know about.

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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.