Earnings Beat: NATCO Pharma Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

NATCO Pharma Limited (NSE:NATCOPHARM) defied analyst predictions to release its second-quarter results, which were ahead of market expectations. The company beat forecasts, with revenue of ₹14b, some 4.1% above estimates, and statutory earnings per share (EPS) coming in at ₹37.81, 20% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 NATCO Pharma

Taking into account the latest results, the most recent consensus for NATCO Pharma from eleven analysts is for revenues of ₹50.9b in 2025. If met, it would imply a decent 12% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 3.6% to ₹112. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹50.1b and earnings per share (EPS) of ₹108 in 2025. So the consensus seems to have become somewhat more optimistic on NATCO Pharma's earnings potential following these results.

The consensus price target was unchanged at ₹1,343, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on NATCO Pharma, with the most bullish analyst valuing it at ₹1,675 and the most bearish at ₹690 per share. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the NATCO Pharma's past performance and to peers in the same industry. It's clear from the latest estimates that NATCO Pharma's rate of growth is expected to accelerate meaningfully, with the forecast 25% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 19% 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. Factoring in the forecast acceleration in revenue, it's pretty clear that NATCO Pharma is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards NATCO Pharma following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for NATCO Pharma going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for NATCO Pharma (1 is significant!) that we have uncovered.

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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.