Earnings Miss: Sun Pharmaceutical Industries Limited Missed EPS By 22% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Sun Pharmaceutical Industries Limited (NSE:SUNPHARMA) filed its first-quarter result this time last week. The early response was not positive, with shares down 4.1% to ₹1,630 in the past week. Statutory earnings per share fell badly short of expectations, coming in at ₹9.50, some 22% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at ₹139b. 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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Taking into account the latest results, the consensus forecast from Sun Pharmaceutical Industries' 36 analysts is for revenues of ₹573.0b in 2026. This reflects an okay 6.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 8.7% to ₹46.97. In the lead-up to this report, the analysts had been modelling revenues of ₹571.8b and earnings per share (EPS) of ₹51.30 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

View our latest analysis for Sun Pharmaceutical Industries

The consensus price target held steady at ₹1,941, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values Sun Pharmaceutical Industries at ₹2,450 per share, while the most bearish prices it at ₹1,525. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. We can infer from the latest estimates that forecasts expect a continuation of Sun Pharmaceutical Industries'historical trends, as the 8.8% annualised revenue growth to the end of 2026 is roughly in line with the 11% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 10% annually. It's clear that while Sun Pharmaceutical Industries' revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sun Pharmaceutical Industries. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at ₹1,941, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Sun Pharmaceutical Industries analysts - going out to 2028, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Sun Pharmaceutical Industries that you need to be mindful 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.