UPL Limited Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
UPL Limited (NSE:UPL) shareholders are probably feeling a little disappointed, since its shares fell 5.2% to ₹577 in the week after its latest quarterly results. Although revenues of ₹102b were in line with analyst expectations, UPL surprised on the earnings front, with an unexpected (statutory) profit of ₹0.12 per share a nice improvement on the losses that the analystsforecast. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, UPL's 18 analysts are now forecasting revenues of ₹564.5b in 2027. This would be a satisfactory 6.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 64% to ₹37.89. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹565.5b and earnings per share (EPS) of ₹39.32 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
View our latest analysis for UPL
It might be a surprise to learn that the consensus price target was broadly unchanged at ₹736, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 UPL, with the most bullish analyst valuing it at ₹880 and the most bearish at ₹600 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that UPL's rate of growth is expected to accelerate meaningfully, with the forecast 9.3% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 1.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 12% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, UPL is expected to grow slower than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for UPL. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.
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 UPL going out to 2029, and you can see them free on our platform here.
Even so, be aware that UPL is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning...
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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.