Earnings Miss: Torrent Pharmaceuticals Limited Missed EPS By 7.7% And Analysts Are Revising Their Forecasts

Torrent Pharmaceuticals Limited (NSE:TORNTPHARM) just released its latest second-quarter report and things are not looking great. Torrent Pharmaceuticals missed analyst forecasts, with revenues of ₹29b and statutory earnings per share (EPS) of ₹13.37, falling short by 2.5% and 7.7% respectively. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Torrent Pharmaceuticals

Taking into account the latest results, the most recent consensus for Torrent Pharmaceuticals from 31 analysts is for revenues of ₹119.5b in 2025. If met, it would imply a satisfactory 6.5% increase on its revenue over the past 12 months. Per-share earnings are expected to step up 12% to ₹59.64. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹120.3b and earnings per share (EPS) of ₹59.95 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 7.1% to ₹3,575. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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. The most optimistic Torrent Pharmaceuticals analyst has a price target of ₹4,235 per share, while the most pessimistic values it at ₹2,932. 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. The analysts are definitely expecting Torrent Pharmaceuticals' growth to accelerate, with the forecast 13% annualised growth to the end of 2025 ranking favourably alongside historical growth of 7.8% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Torrent Pharmaceuticals is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Torrent Pharmaceuticals going out to 2027, 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 Torrent Pharmaceuticals 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.