Torrent Pharmaceuticals Limited (NSE:TORNTPHARM) Analysts Are Pretty Bullish On The Stock After Recent Results
Last week saw the newest annual earnings release from Torrent Pharmaceuticals Limited (NSE:TORNTPHARM), an important milestone in the company's journey to build a stronger business. Torrent Pharmaceuticals reported in line with analyst predictions, delivering revenues of ₹140b and statutory earnings per share of ₹63.92, suggesting the business is executing well and in line with its plan. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Torrent Pharmaceuticals after the latest results.
After the latest results, the 23 analysts covering Torrent Pharmaceuticals are now predicting revenues of ₹189.2b in 2027. If met, this would reflect a sizeable 35% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 7.8% to ₹68.91. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹190.2b and earnings per share (EPS) of ₹64.78 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
See our latest analysis for Torrent Pharmaceuticals
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.7% to ₹4,871. 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 Torrent Pharmaceuticals, with the most bullish analyst valuing it at ₹5,424 and the most bearish at ₹4,051 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. It's clear from the latest estimates that Torrent Pharmaceuticals' rate of growth is expected to accelerate meaningfully, with the forecast 35% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 11% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. 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 biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Torrent Pharmaceuticals' earnings potential next year. 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 in mind, we wouldn't be too quick to come to a conclusion on Torrent Pharmaceuticals. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Torrent Pharmaceuticals going out to 2029, 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 2 warning signs for Torrent Pharmaceuticals 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.