Natco Pharma Limited (NATCOPHARM) share price

₹795.40 on NSE as of 2026-10-08. -1.81% on the day. market cap ₹14,246 Cr. P/E 12.4. 52-week range ₹792.95 to ₹1206.00. Healthcare.

www.natcopharma.co.in

What the company does

Natco is a medium -sized pharmaceutical company, which develops, manufactures and markets formulations and APIs. Founded in 1981, Natco has emerged as an established pharmaceutical company with presence in formulations and APIs in both domestic and export markets. The company owns eight manufacturing facilities and two research centres namely Natco Research Centre in Hyderabad and Research Centre Kothur in Telangana. Its manufacturing facilities have been approved by multiple authorities of regulated markets. Its formulations units in Kothur (Telangana) and Visakhapatnam (Andhra Pradesh) and API facilities in Chennai and Mekaguda (Telangana) have been approved by the USFDA. The company had also set up an agrochemical facility for API s/technicals and formulations in Attivaram Industrial Area, Nellore (Andhra Pradesh) to diversify its portfolio. The company’s API business drives in -house captive requirements for key molecules as well as direct customer sales. As an early entrant with strong R&D capabilities, Natco has established itself as a leading player in the oncology segment in India. In addition, it generates a sizeable proportion of its formulations business from exports. It is present in the generi cs business in the regulated markets of North America a nd Europe and branded generics in the rest of the world (RoW). As on March 31, 2025, the company’s 49.62% share was he

Filed by ICRA, page 5.

Natco Pharma FY26: The Revlimid Cliff and What Lies Beneath

At a glance

Natco's FY26 net profit crashed 25%, from ₹1,885 Cr to ₹1,418 Cr. The culprit: lenalidomide (Revlimid), the blockbuster oncology drug whose profit share was drying up as patent exclusivity eroded in the US.

Revenue slipped 8%, from ₹4,430 Cr to ₹4,078 Cr. Operating margin compressed to 35% from 50% the prior year. The company is not broken—it's reorganizing after a windfall.

Q4 was uglier: sales halved YoY to ₹739 Cr, profit fell 34%. The quarter included a one-time tax benefit of ₹115 Cr (shifting to the new tax regime), which masked an otherwise severe operational step-down.

Management expects FY27 revenue of ₹3,400–3,500 Cr and PAT of ₹700–750 Cr—deliberately cutting guidance in half to reset investor expectations. The message: Revlimid is gone, and the base business is now the scorecard.

The stock price (₹846 on June 11, 2026) sits at a 10.6x P/E on FY26 earnings. Peer median P/E is 31.7x. Why the discount? Earnings volatility and concentration risk—the company admits it has been "jackpot driven" and is now trying to build something less cyclical.

Introduction

Natco Pharma is a vertically integrated, R&D-focused pharmaceutical company headquartered in Hyderabad. It operates across three broad segments: export formulations (oncology and specialty generics), domestic formulations (branded oncology), and active pharmaceutical ingredients (APIs).

The company has transformed itself from a domestic player into a complex-generic powerhouse, particularly in the US market. It manufactures in seven facilities across India and has established front-end subsidiaries in Brazil, Canada, the US, and several other markets. As of March 2026, it had 17.9 Cr equity shares outstanding (face value ₹2 each).

Recent moves define the moment. In November 2025, Natco acquired a 35.75% stake in Adcock Ingram Holdings, a South African pharmaceutical company, for ₹2,000 Cr—a bet on geographic diversification outside the volatile US generics space. In March 2026, it approved a demerger of its agrochemicals business (Natco Crop Health Sciences), which had grown from ₹60 Cr revenue in FY25 to ₹140 Cr in FY26.

The ICRA credit rating stands at [ICRA]AA (Stable)/A1+. The company maintains a net cash position of roughly ₹2,400 Cr.

Business model

**Export Formulations (74% of FY26 revenue, ₹2,994 Cr in absolute terms).** Natco manufactures finished-dosage generics in oncology, cardiovascular, neurology, and immunology—complex molecules with high barriers to entry. It ranks among the top 10 generic companies by sales in Canada and has partnerships with front-end players like Sun Pharma, Alvogen, Teva, Mylan, and others for US distribution. The company is also building its own front-end presence through subsidiaries (Brazil, Canada, US).

The Revlimid profit share was the crown jewel here. In FY24 and FY25, this single molecule (a complex oncology drug) turbo-charged margins and earnings. Patent expiry in Q2 FY26 removed it from the windfall column—management now treats this as a "learning" that the company must not be hostage to a few molecules.

**Domestic Formulations (10% of revenue, ₹448 Cr).** Natco is the market leader in branded oncology in India. It sells tablets, capsules, and injections for oncology, cardiology, and specialty conditions. Margins here are lower than exports but more stable.

**Active Pharmaceutical Ingredients (6% of revenue, ₹235 Cr).** Natco manufactures APIs for oncology, CNS, and pain management. The company holds 49 active US DMF (Drug Master File) registrations and has capabilities in multi-step synthesis, semi-synthetic fusion, and peptides.

**Crop Health Sciences (3% of revenue, ₹140 Cr).** A recent growth platform offering pesticides, insecticides, and bio-stimulants. Management sees this as a long-cycle build (3–4 years commercial presence, last 2 years mostly market learning). The demerger in FY27 is designed to let it grow independently without diluting pharma focus.

Quarterly results, balance sheet, cash flow, ratios, shareholding and the filings themselves are on the full page for Natco Pharma Limited.

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