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    Natco Pharma Q1 FY27 earnings call

    NATCOPHARM
    Healthcare·14 Aug 2026
    Management Summary

    Natco Pharma reported Q1 FY27 consolidated revenues of INR794.4 crores, a decline from the previous year primarily due to lower Lenalidomide sales. However, the company achieved a normalized PAT growth of 34% QoQ and an EBITDA margin of 30.9%. Strong growth was observed in the Brazil business (180%) and domestic formulations, while the Crop Health business incurred a loss but is expected to break even for the year. The company also increased its stake in Adcock Ingram to 49% and is exploring M&A opportunities, planning a fundraise of INR2,000 crores.

    Highlights

    7

    • Consolidated total revenues of INR794.4 crores in Q1 FY27.

    • EBITDA stood at INR245.7 crores with EBITDA margin of 30.9%.

    • Normalized PAT grew by 34% QoQ to INR206.5 crores.

    • Brazil business revenue grew 180% to INR178 crores.

    • Acquired additional 13.25% stake in Adcock Ingram, increasing total holding to 49%.

    • Domestic formulation business revenue at INR136 crores, with double-digit growth in base business.

    • eGenesis (innovation asset) doing reasonably well, with pig kidney transplants surviving over 8 months.

    Concerns

    4

    • Consolidated total revenues declined from INR1,390.6 crores in Q1 last year, primarily due to lower Lenalidomide revenue.

    • Crop Health business made a loss in Q1 FY27, though expected to break even for the year.

    • Semaglutide market in India described as 'cutthroat' and 'not so good' due to intense competition.

    • Quarterly tax rate was high due to larger contribution from Brazil (tax rate over 35%).

    Key financials

    Single quarter

    04 metrics
    1. 01Consolidated Total Revenues₹794.4 Cr-42.9%YoY
    2. 02EBITDA₹245.7 Cr
    3. 03EBITDA Margin30.9%
    4. 04Normalized PAT₹206.5 Cr+34.1%QoQ

    Segment breakdown

    Domestic Formulation Business
    ₹136 Cr Revenue
    Brazil Business
    ₹178 Cr Revenue1.8% Growth
    Canada Sales
    ₹56 Cr Sales
    Adcock Ingram (NATCO Share)
    ₹84.3 Cr Profit Share
    Crop Health Sciences
    ₹40 Cr RevenueLoss status Profitability
    List

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Capex

    ₹250 crores

    Debt

    Debt disclosed

    M&A

    Adcock Ingram Holdings Limited

    acquisition · closed

    Liquidity

    Cash ₹1,400 crores

    Net cash as of today is around INR1,400 crores. Closed last year at about INR2,400 crores of cash. After paying for Adcock stake, still have INR1,000-1,500 crores cash. Proposed fundraise of INR2,000 crores for M&A, short-term loans, and capex.

    Guidance & targets

    12
    CategoryTargetPriority
    Volume
    Domestic Business Volume Growth
    25%
    		Medium
    Profitability
    Crop Health Business Breakeven
    Breakeven
    		High
    Profitability
    PAT
    INR750 crores
    		High
    Revenue
    Crop Health Business Revenue
    INR138 crores
    		Medium
    Revenue
    Total Gross Sales
    INR3,300-3,400 crores
    		High
    Revenue
    Semaglutide (India) Monthly Sales
    INR2 crores
    		High
    Product Launch
    Carfilzomib Launch
    Calendar '27
    		High
    Product Launch
    Adcock Product Launch
    FY28
    		Medium
    Product Launch
    FTF Deliveries
    1-2
    		High
    R&D Spend
    Long-term R&D Allocation
    70-80%
    		High
    ANDA Filings
    ANDA Filings per year
    8-10
    		High
    ANDA Filings
    FTF Filings per year
    2-3
    		High

    What to watch in Q2 FY27

    5

    Crop Health Business Profitability

    Next quarter (Q2 FY27 results)
    CurrentLoss in Q1 FY27
    TargetBreakeven for FY27 (with Q2 being significantly better)

    Why it matters

    Indicates the success of a new business segment and its contribution to overall profitability.

    So basically, for the quarter, there was a loss, right? But the goal and our expectation for the year is to break even. If you look at overall scenario for the Crop Health, it is very seasonal, Rashmi. As probably most of you are aware, there has been the El Nino fear and delay in rains. So that is what actually caused a little bit of delay in the cropping season. We expect Q2 to be significantly better than Q1, and I think we are on track to, again, as I said, to break even for the year.

    Risks & concerns

    5
    RiskSeverity

    Lower Lenalidomide Revenue

    The decline in consolidated revenue is largely attributable to lower Lenalidomide revenue during the quarter. — Management acknowledged

    medium

    Crop Health Business Loss in Q1

    The Crop Health business incurred a loss in Q1 FY27, attributed to seasonal cycles and delays in cropping season. — Management acknowledged

    low

    Intense Competition in Semaglutide Market (India)

    The semaglutide market in India is described as 'cutthroat' and 'very intense' with 'not so good' conditions currently. — Management acknowledged

    medium

    Tax Rate Volatility

    The quarterly tax rate can be high and volatile due to varying contributions from different geographies with different tax rates (e.g., Brazil over 35%). — Management acknowledged

    low

    Land Bank Litigation

    Approximately 15-20% of the company's land bank is tied up in litigation, making divestment challenging despite potential value. — Management acknowledged

    low

    Q&A highlights

    8

    “So, Brazil has grown, as I said, by 180%. The revenues of Brazil, as I mentioned earlier, was INR178 crores. Canada sales for the quarter was around INR56 crores.”

    Analyst sought constant currency growth and detailed breakdown, but management only provided absolute numbers and growth for Brazil.

    asked by Vamsi

    3 min read7 chapters

    Detailed Narrative

    01

    Q1 FY27 Financial Performance Overview

    Natco Pharma reported consolidated total revenues of INR794.4 crores for Q1 FY27, a notable decline from INR1,390.6 crores in the corresponding quarter last year, primarily attributed to lower Lenalidomide revenue. Despite this, the company achieved a robust EBITDA of INR245.7 crores, resulting in an EBITDA margin of 30.9%. On a normalized basis📎, excluding a one-time📎 benefit from Q4 FY26, consolidated profit after tax grew by 34% quarter-on-quarter to INR206.5 crores, reflecting improved performance in international and domestic businesses and controlled operating costs.

    02

    Strategic Investment and Adcock Ingram's Contribution

    In July 2026, Natco Pharma increased its stake in its associate company, Adcock Ingram Holdings Limited, by an additional 13.25%, bringing its total holding to 49%. This move aims to strengthen Natco's strategic position in the South African market. Adcock Ingram reported revenues of INR1,582.8 crores and a profit after tax of INR242.2 crores, with Natco's share of profit amounting to INR84.3 crores. The strong performance of Adcock Ingram this quarter was largely driven by a significant flu season in South Africa.

    03

    Geographic Business Performance and Growth Drivers

    The domestic formulation business demonstrated strong performance, with revenues reaching INR136 crores, driven by double-digit growth in its base business, partially supported by semaglutide. The Brazil business exhibited exceptional growth, with revenues of INR178 crores, representing a 180% increase. Canada sales for the quarter stood at INR56 crores. Management anticipates overall domestic volumes to increase by approximately 25% in FY27, indicating continued growth momentum across key markets.

    04

    Crop Health Sciences Segment Performance and Outlook

    The Crop Health Sciences segment generated INR40 crores in Q1 FY27 but recorded a loss for the quarter. This performance was attributed to seasonal cycles and delays in the cropping season, influenced by El Nino fears. However, management expressed confidence in a significant improvement in Q2 and expects the segment to break even for the full fiscal year. The company aims for Crop Health gross sales to reach approximately INR750 crores for FY27.

    05

    Pipeline Development and Future Launches

    Natco Pharma is actively advancing its product pipeline. The launch of Carfilzomib is on track for Calendar '27, with plant upgrades expected to be completed by the end of the current calendar year. For Olaparib, litigation is ongoing, with a trial date anticipated in the next few months⏳, and the company is pursuing arguments for exclusivity. Natco maintains an internal target of filing 8-10 ANDAs annually, including 2-3 First-to-File (FTF) opportunities, with hopes to deliver at least one or two FTFs this year.

    06

    Capital Allocation Strategy and Fundraise Plans

    The company's net cash position is approximately INR1,400 crores, down from INR2,400 crores at the end of FY26, following investments totaling around INR3,000 crores in Adcock Ingram. To support future growth, including potential M&A opportunities, repayment of short-term loans, and an organic capex plan of INR250-300 crores annually, Natco Pharma plans to raise INR2,000 crores. The company is exploring various options for this fundraise, including Qualified Institutional Placements (QIP) and rights issues.

    07

    Long-term R&D and Innovation Focus

    Natco Pharma emphasized its long-term vision for R&D and innovation, with 70-80% of its R&D expenditure allocated to projects expected to yield returns between 2028 and 2035. The company highlighted the progress of its eGenesis innovation asset, noting that pig kidney transplants have survived for over 8 months. This strategic focus on long-term, high-return projects underscores the company's commitment to sustainable growth and pipeline development.

    This is an AI-generated summary of a publicly available earnings call transcript.