Earnings Beat: Sai Life Sciences Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

As you might know, Sai Life Sciences Limited (NSE:SAILIFE) just kicked off its latest second-quarter results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 8.2% to hit ₹5.4b. Sai Life Sciences also reported a statutory profit of ₹3.93, which was an impressive 40% above what the analysts had forecast. 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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Following the latest results, Sai Life Sciences' five analysts are now forecasting revenues of ₹21.5b in 2026. This would be a satisfactory 4.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 4.4% to ₹14.26. Before this earnings report, the analysts had been forecasting revenues of ₹21.3b and earnings per share (EPS) of ₹11.70 in 2026. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the sizeable expansion in earnings per share expectations following these results.

See our latest analysis for Sai Life Sciences

The consensus price target rose 9.6% to ₹1,054, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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 Sai Life Sciences, with the most bullish analyst valuing it at ₹1,197 and the most bearish at ₹975 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Sai Life Sciences is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Sai Life Sciences' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 8.7% growth on an annualised basis. This is compared to a historical growth rate of 38% over the past year. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 18% annually. Factoring in the forecast slowdown in growth, it seems obvious that Sai Life Sciences is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Sai Life Sciences' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Sai Life Sciences' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Sai Life Sciences going out to 2028, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Sai Life Sciences that 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.