Zydus Lifesciences Limited Just Beat EPS By 9.8%: Here's What Analysts Think Will Happen Next

Zydus Lifesciences Limited (NSE:ZYDUSLIFE) just released its latest annual results and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 3.9% to hit ₹271b. Statutory earnings per share (EPS) came in at ₹50.09, some 9.8% above whatthe analysts had expected. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following the latest results, Zydus Lifesciences' 27 analysts are now forecasting revenues of ₹310.4b in 2027. This would be a solid 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to descend 15% to ₹42.62 in the same period. Before this earnings report, the analysts had been forecasting revenues of ₹284.0b and earnings per share (EPS) of ₹41.09 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

View our latest analysis for Zydus Lifesciences

With these upgrades, we're not surprised to see that the analysts have lifted their price target 8.0% to ₹1,064per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Zydus Lifesciences, with the most bullish analyst valuing it at ₹1,457 and the most bearish at ₹800 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.

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 period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 14% growth on an annualised basis. That is in line with its 13% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 12% per year. It's clear that while Zydus Lifesciences' 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 takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Zydus Lifesciences' earnings potential next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Zydus Lifesciences will grow in line with the overall 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.

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. At Simply Wall St, we have a full range of analyst estimates for Zydus Lifesciences going out to 2029, and you can see them free on our platform here..

You still need to take note of risks, for example - Zydus Lifesciences has 1 warning sign we think 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.