Results: Aurobindo Pharma Limited Exceeded Expectations And The Consensus Has Updated Its Estimates
Investors in Aurobindo Pharma Limited (NSE:AUROPHARMA) had a good week, as its shares rose 4.9% to close at ₹1,658 following the release of its quarterly results. Aurobindo Pharma reported ₹92b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of ₹17.86 beat expectations, being 6.0% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Aurobindo Pharma after the latest results.
Taking into account the latest results, the current consensus from Aurobindo Pharma's 27 analysts is for revenues of ₹400.5b in 2027. This would reflect a meaningful 15% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 24% to ₹80.04. In the lead-up to this report, the analysts had been modelling revenues of ₹395.1b and earnings per share (EPS) of ₹78.22 in 2027. So the consensus seems to have become somewhat more optimistic on Aurobindo Pharma's earnings potential following these results.
See our latest analysis for Aurobindo Pharma
The consensus price target was unchanged at ₹1,632, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. There are some variant perceptions on Aurobindo Pharma, with the most bullish analyst valuing it at ₹1,900 and the most bearish at ₹1,241 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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 Aurobindo Pharma's rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 8.7% p.a. 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 12% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Aurobindo Pharma 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 Aurobindo Pharma's 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 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 Aurobindo Pharma analysts - going out to 2029, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Aurobindo Pharma that you need to take into consideration.
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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.