Zydus Lifesciences Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Zydus Lifesciences Limited (NSE:ZYDUSLIFE) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 5.4% to hit ₹62b. Zydus Lifesciences reported statutory earnings per share (EPS) ₹14.11, which was a notable 16% 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.

View our latest analysis for Zydus Lifesciences

Taking into account the latest results, the consensus forecast from Zydus Lifesciences' 31 analysts is for revenues of ₹224.3b in 2025. This reflects a solid 8.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 9.1% to ₹45.19. In the lead-up to this report, the analysts had been modelling revenues of ₹219.4b and earnings per share (EPS) of ₹42.12 in 2025. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

It will come as no surprise to learn that the analysts have increased their price target for Zydus Lifesciences 12% to ₹1,190on the back of these upgrades. 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. Currently, the most bullish analyst values Zydus Lifesciences at ₹1,500 per share, while the most bearish prices it at ₹816. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Zydus Lifesciences' rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 7.5% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 10% per year. Zydus Lifesciences is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Zydus Lifesciences' earnings potential next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Zydus Lifesciences 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 1 warning sign for Zydus Lifesciences 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.