NATCO Pharma Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

A week ago, NATCO Pharma Limited (NSE:NATCOPHARM) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. NATCO Pharma delivered a significant beat with revenue hitting ₹14b and statutory EPS reaching ₹28.94, both beating estimates by more than 10%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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After the latest results, the consensus from NATCO Pharma's eleven analysts is for revenues of ₹39.0b in 2026, which would reflect a considerable 12% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to sink 12% to ₹75.28 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹38.6b and earnings per share (EPS) of ₹69.20 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

Check out our latest analysis for NATCO Pharma

The consensus price target was unchanged at ₹980, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on NATCO Pharma, with the most bullish analyst valuing it at ₹1,480 and the most bearish at ₹712 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.

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. We would highlight that revenue is expected to reverse, with a forecast 23% annualised decline to the end of 2026. That is a notable change from historical growth of 21% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 11% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - NATCO Pharma is expected to lag the wider 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that NATCO Pharma's revenue is expected to perform worse than the wider industry. The consensus price target held steady at ₹980, with the latest estimates not enough to have an impact on their price targets.

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 NATCO Pharma analysts - going out to 2028, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with NATCO Pharma (including 1 which is a bit unpleasant) .

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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.