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Natco Pharma Ltd
NSE: NATCOPHARM BSE: 524816 INE987B01026 Healthcare Pharma 🔎 Screen
NIFTY 500 Smallcap 50 Smallcap 100 Smallcap 250
₹16,694 Cr
Market Cap
11.9
P/E
0.46
PEG
17.1%
ROCE
16.9%
ROE
0.08
D/E
31.8%
OPM
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📈 Price History
Ratio Health
Excellent
Good
Average
Poor
By Category
Shareholding
About

NATCO Pharma Limited (NATCO) is a vertically integrated, research and development focused pharmaceutical company engaged in developing, manufacturing, and marketing complex products for niche therapeutic areas. NATCO has established its presence in all three business segments viz. finished dosage formulations (“FDF”), active pharmaceutical ingredients (“APIs”), Contract Manufacturing Business.

✓ Strengths 2
  • Company is almost debt free.
  • Company has delivered good profit growth of 27.7% CAGR over last 5 years
! Concerns 1
  • Tax rate seems low
Key Ratios Snapshot
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📈 Growth Pattern
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Weak quarter: revenue fell 36.5% YoY, impacted by a sharp 48.7% drop in export formulations; reported PAT boosted by one-time tax benefit of ₹115 Cr, but adjusted PAT declined 62%. quarter Investor Presentation One-Pager? Mar 2026
Revenue
₹816.9 Cr
vs ₹1,287.3 Cr in Q4FY25, -36.5% YoY
EBITDA Margin
25.1%
vs 47.7% in Q4FY25, -2,260 bps YoY, including other income
PAT
₹269.0 Cr
vs ₹406.0 Cr in Q4FY25, -33.7% reported; excl. one-time tax benefit of ₹115 Cr, PAT would be ₹154 Cr, -62% YoY
Export Formulation Rev.
₹539.6 Cr
vs ₹1,052.5 Cr in Q4FY25, -48.7% YoY
What Went Right
  • Launched Semaglutide multi-dose vials in India at affordable price, and Pomalidomide, Everolimus, Bosentan tablets in US market.
  • Crop Health Sciences revenue grew 50.7% YoY in Q4 (₹22.6 Cr vs ₹15.0 Cr) and 131% for FY26 (₹138.2 Cr vs ₹59.8 Cr).
  • One-time tax benefit of ₹115 Cr from electing new tax regime lifted reported PAT margin to 36.4% in Q4.
  • Strategic acquisition of 35.75% stake in Adcock Ingram, South Africa, completed during FY26.
  • Reported EPS of ₹14.96 for Q4 (includes one-time) and ₹79.20 for FY26.
What to Watch
  • Export formulations revenue plunged 48.7% YoY in Q4, dragging overall revenue down 36.5%; no explanation provided for the steep decline.
  • EBITDA margin collapsed from 47.7% in Q4FY25 to 25.1%, even with other income included.
  • Adjusted PAT (excluding one-time tax benefit) fell 62% YoY, signalling weak underlying profitability.
  • FY26 full-year revenue was ₹4,375.9 Cr, down 8.5% from FY25; EBITDA margin dropped from 53.3% to 39.6%.
  • No explicit guidance on future revenue or margin recovery; pipeline visibility remains limited.
Investor Lens
Natco Pharma delivered a weak Q4 with core export formulations declining sharply, though the company highlighted several new US launches and a strong FTF pipeline of over 20 products. The sharp margin compression and lack of revenue guidance raise near-term caution. Investors should watch for recovery in export sales and commercial traction from semaglutide and pomalidomide launches. The strategic Adcock Ingram acquisition and investments in cell/gene therapy offer long-term optionality but do not offset current operational weakness. The full-year margin decline from 53% to 40% suggests the high-margin product bonanza of FY25 may not repeat. Next quarter's revenue trajectory and commentary on pipeline monetisation will be critical to reassess the thesis.
From investor presentation · AI-generated analysis · Not investment advice
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📉 WEAK Revenue down 39.5% YoY, operating margin plunges to 17%, net profit boosted by tax credit.
Revenue
Revenue at ₹739 Cr declined 39.5% YoY from ₹1,221 Cr, though it improved 14.2% sequentially from ₹647 Cr. The sharp YoY drop indicates significant loss of business, possibly from product exclusivity expiry or pricing pressure.
Profitability
Net profit at ₹269 Cr fell 33.7% YoY despite a negative tax expense of -62% (likely deferred tax credit). EPS stood at ₹14.96 versus ₹22.70 a year ago. Without the tax benefit, net profit would have been much lower.
Margins
Operating profit margin collapsed to 17% from 45% last year and 25% last quarter, reflecting severe cost pressures or lower realizations. The 76.6% YoY drop in operating profit underscores the margin squeeze.
Cash Flow
No CFO data available from the provided snapshot.
Balance Sheet
Borrowings at ₹714 Cr and reserves at ₹9,185 Cr give a low debt-to-equity ratio of 0.08. Total assets stand at ₹11,074 Cr, indicating a strong equity base but moderate debt.
Key Risks
1) The 39.5% revenue decline suggests loss of a major revenue stream, possibly from generic launches. 2) Operating margin at 17% is unsustainable and may fall further if costs persist. 3) The negative tax expense is unusual and may not recur, making reported net profit misleading.
Outlook
Sequential revenue growth is encouraging, but it needs to sustain to recover lost ground. Restoring operating margins to historical levels is critical for long-term profitability.
Generated by AI · Mar 2026 results · Not investment advice
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Revenue by Segment

Segment Q2FY26 Q3FY26 Trend
Agro Chemicals
53
EBIT -7
28
EBIT -10
Pharmaceuticals
1,311
EBIT 633
619
EBIT 180
Total 1,363 647

Source: NSE Integrated Filing XBRL (Reg. 33 Ind AS). Values in ₹ Crore.

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