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Zydus Wellness Limited Just Missed Earnings - But Analysts Have Updated Their Models
Zydus Wellness Limited (NSE:ZYDUSWELL) came out with its second-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks like a pretty bad result, all things considered. Although revenues of ₹11b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 47% to hit ₹0.16 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Zydus Wellness' nine analysts is for revenues of ₹54.2b in 2027. This reflects a notable 8.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 28% to ₹9.90. In the lead-up to this report, the analysts had been modelling revenues of ₹53.1b and earnings per share (EPS) of ₹12.05 in 2027. So it's pretty clear the analysts have mixed opinions on Zydus Wellness after the latest results; even though they upped their revenue numbers, it came at the cost of a real cut to per-share earnings expectations.
Check out our latest analysis for Zydus Wellness
The consensus price target was unchanged at ₹605, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Zydus Wellness, with the most bullish analyst valuing it at ₹662 and the most bearish at ₹548 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Zydus Wellness is an easy business to forecast or the the analysts are all using similar assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Zydus Wellness'historical trends, as the 17% annualised revenue growth to the end of 2027 is roughly in line with the 17% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 11% per year. So it's pretty clear that Zydus Wellness is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 Zydus Wellness analysts - going out to 2029, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Zydus Wellness (1 is significant) you should be aware of.
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