Natco Pharma Limited — Q3 FY26 earnings call

Call held 12 Feb 2026

Management summary

Natco Pharma delivered a strong Q3 FY26, reporting consolidated revenue of ₹705.4 crores and a robust EBITDA margin of 30.7%, with net profit at ₹151.3 crores. The company declared an interim dividend and is focused on geographical expansion and strategic acquisitions, leveraging its significant cash reserves. Key pipeline products like semaglutide and NCE investments such as eGenesis are central to future growth, though regulatory and competitive challenges persist.

Highlights

  • Consolidated total revenue for Q3 FY26 grew to ₹705.4 crores from ₹651.1 crores in Q3 FY25, an 8.34% YoY increase.

  • Achieved a healthy EBITDA of ₹216.8 crores with a margin of 30.7% for Q3 FY26.

  • Reported a net profit of ₹151.3 crores for the quarter on a consolidated basis.

  • Declared an interim dividend of ₹1.5 per equity share during Q3 FY26.

  • Strong performance from subsidiaries in Brazil and Canada, and the Middle East, contributing to export formulations growth with zero Revlimid contribution this quarter.

Concerns

  • Ongoing litigation for erdafitinib and olaparib, making launch timelines premature and uncertain.

  • Semaglutide market in India is expected to be extremely competitive with many generics.

  • Management is not considering a share buyback despite a net cash position of ₹2,500 crores, prioritizing cash for large acquisitions.

Key financials

2 periods

Headline

  • Consolidated Revenue
    ₹705.4 Cr
    YoY +8.3%
  • EBITDA
    ₹216.8 Cr
  • EBITDA Margin
    30.7%
  • Consolidated Net Profit
    ₹151.3 Cr
  • NATCO Adcock Profit Reflection (Nov-Dec 2025)
    ₹29.65 Cr
  • One-time Amortization
    ₹18.75 Cr
  • NATCO Adcock Profit Reflection (Net)
    ₹10.9 Cr

H1 FY26

  • Adcock Ingram Revenue
    ₹2,464 Cr
  • Adcock Ingram PAT
    ₹198 Cr

What they filed

Q1 FY27: revenue down 50.0%, net profit down 83.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,293 408 1,157 1,193 1,264 −2%529 +30%609 −47%597 −50%
EBITDA791 29 561 540 552 −30%120 +314%92 −84%106 −80%
Net profit661 125 428 464 501 −24%107 −14%210 −51%75 −84%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Debt Net ₹2,500 Cr
    Regarding buyback, at this time, I'm not really thinking about it. I think my sense is that there are further acquisitions to do, and we are actively engaging trying to do another very large transaction, we have enough cash. I would like to preserve my cash for another transaction similar to size of Adcock. I wouldn't want to do a buyback at this time.
  • Dividend ₹1.5/share (interim)
    The Board of Directors have declared an interim dividend of INR1.5 per equity share of INR2 each during Q3 of FY '26.
  • M&A Adcock Ingram Holdings Acquisition · Integrated

    Geographical expansion and diversification of profit base.

    Contributed ₹29.65 crores profit reflection (before amortization) for Nov 10 - Dec 31, 2025. Expected ₹35-40 crores PAT addition per quarter going forward.

    Revenue from our associated company, Adcock Ingram Holdings, South Africa for the first half of the financial year which ended December 31st, 2025, was at INR2,464 crores at a profit after tax of INR198 crores. For NATCO, the profit picked for the period, which started from 10th November to 31st December 2025 at 35.75% amounts to INR29.65 crores. So after a one-time/period amortization of INR18.75 crores, the associated profit reflection in NATCO's financials amounts to INR10.9 crores.
  • M&A Undisclosed Acquisition Targets Acquisition · Announced

    To achieve scale, supplement existing portfolio, or add new geographies, focusing on Emerging markets and brand business.

    A mix of debt, equity, and cash flow would be used for funding if the acquisition is large enough.

    I think my sense is that there are further acquisitions to do, and we are actively engaging trying to do another very large transaction, we have enough cash. I would like to preserve my cash for another transaction similar to size of Adcock. I wouldn't want to do a buyback at this time. So we're actively pursuing 2, 3 targets and were hoping we'll be able to close. this in 2025, Adcock. So something large, we want to close at least 1 or 2 we are pursuing. So if we're lucky 2 or at least 1 in 2026, we want to close in this calendar year for sure, all subject to clearance of diligence and clearance of whatever other things that we need to close.
  • Liquidity Cash ₹2,500 Cr Company has sufficient cash to pursue large acquisitions and is preserving it for this purpose.
    Actually, the cash position net is about INR2,500 crores. I just want to be more precise. Regarding buyback, at this time, I'm not really thinking about it. I think my sense is that there are further acquisitions to do, and we are actively engaging trying to do another very large transaction, we have enough cash. I would like to preserve my cash for another transaction similar to size of Adcock. I wouldn't want to do a buyback at this time.

Guidance & targets

Revenue

  • Consolidated Revenue Revenue · FY26 · High confidence ₹4,300 crores
    I think we have done is this year, I think we are more or less going to meet the guidance. I think we should do about INR4,200 crores to INR4,300 crores is what my expectation is.

    — Rajeev Nannapaneni

Profitability

  • Consolidated PAT Profitability · FY26 · High confidence ₹1,280-1,300 crores
    And PAT also, I think we are at almost INR1,150 crores for 9 months. So we'll end with, I think, around INR1,280 crores to INR1,300 crores is what I said.

    — Rajeev Nannapaneni

  • Adcock Ingram PAT Contribution Profitability · Ongoing · Medium confidence ₹35-40 crores per quarter
    But I think the accountants are working on finalizing the number, but roughly, I think above that is what my expectation is. So back of our hand, I mean, if you assume that this is a steady-state number and they're able to repeat the numbers, we will be adding about INR35 crores to INR40 crores of PAT to our balance sheet every quarter from Adcock.

    — Rajeev Nannapaneni

Amortization

  • Adcock Ingram Amortization Amortization · Ongoing · Medium confidence ₹10-14 crores per year / ₹3 crores per quarter
    There will be an element of amortization. I think the accountants are working on it. It will be about INR10 crores to INR14 crores per year. So essentially, a thumb rule for you would be take Adcock's profit, take 35.75% of their profit and remove about INR10 crores to INR15 crores from that for amortization. I mean any one-times happen that I can't project for you. But I think that will be the quarterly amortization. It will be split over quarters. So I think maybe about INR3 crores a quarter is what our expectation is.

    — Rajeev Nannapaneni

Domestic Business Growth

  • India Business Growth Domestic Business Growth · This year (FY26) · High confidence >20%
    So I think our internal target is that our domestic business should grow more than 20% this year because of semaglutide.

    — Rajeev Nannapaneni

De-merger

  • Crop Health Sciences De-merger De-merger · Next 8-9 months · Medium confidence October/November
    I think we have started the process. So, I think roughly, we're thinking by October, November, but I don't want to say any definite timelines, but this is our, what should I say, goal to do. But I mean, there's a lot of processes that we have to run, right? So I think the process will take whatever time it will take. But our end goal is that we should be able to do it in the next 8, 9 months.

    — Rajeev Nannapaneni

Product Launches

  • US ANDA Approvals (non-Para IV) Product Launches · Q4 FY26 / Q1 FY27 · High confidence Expected in April-June quarter
    We have some ANDAs that we're expecting approval in the next few months. So those are non-Para IV ANDAs and which we're marketing through our own front end. So those we're expecting in around April to June quarter, we're expected to draw.

    — Rajeev Nannapaneni

  • US Shared FTF Launch Product Launches · FY27 · High confidence One expected next financial year
    And we are expecting at least one of our first to files in the U.S. shared FTF that we're going to launch in the next few months. So that's our expectation. Which one and all, we can't reveal. But yes, one of our shared FTFs, we're going to launch in the next financial year. So benefit of that you'll see in the next financial year, which I think will also add to the baseline.

    — Rajeev Nannapaneni

Product Filings

  • Complex Generic Filings Product Filings · This year (FY26) · Medium confidence 8 products
    We are going to file about 4, 5 products we have filed. I think the total target is that we're going to file about 8 products.

    — Rajeev Nannapaneni

Regulatory

  • Chennai Plant FDA Classification Regulatory · Next quarter · High confidence Expected in next 30-40 days
    We're expecting the classification in the next 30, 40 days

    — Rajeev Nannapaneni

  • Vizag Plant FDA Inspection Regulatory · FY26 · Medium confidence Expected this year
    Vizag formulation facility, I think will get an inspection sometime this year.

    — Rajeev Nannapaneni

What to watch in Q4 FY26

Semaglutide Market Uptake and Competition

Next quarter
Current Market expected to be competitive, uptake clarity expected next quarterly call.
Target Initial market traction and competitive landscape for semaglutide in India.

Why it matters

Semaglutide is a key driver for the domestic business, targeted to grow >20% this year.

If you ask me, I think the next quarterly call, I'll give you an idea of how the uptake is and what I believe the market will entail in capacity because at this time, it's very early, because there are a lot of permutations combinations like you know that Mounjaro is doing better than semaglutide in the Indian market. But obviously, with a lower price, there will be some uptake.

Risks & concerns

  • Semaglutide Market Competition

    medium

    The semaglutide market in India is expected to be extremely competitive with many generics, potentially impacting uptake and pricing.

    Management acknowledged

  • Litigation Delays for Pipeline Products

    medium

    Ongoing litigation for products like erdafitinib and olaparib is delaying launch timelines, creating uncertainty for future revenue streams.

    Management acknowledged

  • High-Risk NCE Investments

    medium

    Investments in novel technologies like eGenesis (CRISPR-Cas9 for organ transplantation) are high-risk, with success dependent on clinical trial outcomes over several years.

    Management acknowledged

  • Adcock Ingram Shareholding Limitation

    low

    Bidvest is currently not interested in selling more shares of Adcock Ingram, which limits Natco's ability to quickly increase its stake and achieve higher turnover targets through this route.

    Management acknowledged

Q&A highlights

7 direct
GLP-1 (Semaglutide) Market Strategy and Capacity Direct
GLP-1 approval is expected sometime this month. It's pending at DCGI. Capacity right now, we are outsourcing from OneSource. As of now, we don't have any capacity. So right now, our tie-up is for India OneSource we're doing and then we're not actively pursuing emerging markets. We're actively pursuing only regulated markets.

Clarifies the company's immediate strategy for semaglutide launch in India, including outsourcing and market focus, highlighting the competitive landscape.

Asked by Gautam

Cash Utilization: Buyback vs. Acquisitions Direct
Actually, the cash position net is about INR2,500 crores. I just want to be more precise. Regarding buyback, at this time, I'm not really thinking about it. I think my sense is that there are further acquisitions to do, and we are actively engaging trying to do another very large transaction, we have enough cash. I would like to preserve my cash for another transaction similar to size of Adcock.

Reveals management's capital allocation priority towards large acquisitions over shareholder returns via buybacks, indicating future inorganic growth plans.

Asked by Love Gupta

Adcock Ingram Amortization and Profit Contribution Direct
This is a onetime amortization. But we will also have to see, how we're going to account for Adcock profit. So whatever Adcock profit is there, 35.75% of that will be consolidated into NATCO's books. There will be an element of amortization. I think the accountants are working on it. It will be about INR10 crores to INR14 crores per year.

Provides clarity on the financial impact of the Adcock Ingram acquisition, detailing both one-time and recurring amortization and expected profit contribution.

Asked by Candice Pereira

eGenesis Investment and NCE Pipeline Potential Direct
See, this technology is called CRISPR, CRISPR-Cas9 technology. What they do is they do a genetic modification of the pig and which makes it more likely that the humans will accept the kidney. You can do for kidney, you can do for heart, you can do for liver. This is probably the most disruptive thing that's going to happen in medicine. If you ask me, this is an idea of the decade.

Highlights a significant, high-risk NCE investment (eGenesis) and its potential to be a disruptive technology in organ transplantation, signaling a long-term growth avenue.

Asked by Nitin Gandhi

R&D Spend Strategy Post-Revlimid Decline Direct
I think a lot of the R&D budget in terms of allocation, and all was done in the September quarter, a lot of the projects because we knew that there will be a decline in Revlimid. So a lot of the allocations were done for the next 12 months in September. So, I think that a lot of the R&D for the next few months is covered already for most part.

Explains how the company adjusted its R&D strategy and spending in anticipation of the Revlimid patent cliff, indicating proactive cost management and continued focus on complex generics.

Asked by Hrishikesh Patole

Olaparib Launch Timelines and Litigation Status Partial
We're awaiting tentative approval. So that is one milestone we need to achieve. The second milestone is we are still litigating the product. So we don't have any time lines at this time. So at this time, I can't answer that question. But I think we'll have clarity in the next few months.

Indicates the ongoing regulatory and legal hurdles for a key pipeline product, suggesting potential delays in its market entry.

Asked by Abhigyan Srivastav

Semaglutide Sole FTF Status and FDA Approvals Direct
We don't, I think neither do we or any of our competitors have an approval with FDA on semaglutide. Nobody has approval on semaglutide in 30 months. Certain strengths of both the products, we are sole FTF, you're right, absolutely right, and which is covering a significant part of it. Did we get approval in 30 months? The answer is no.

Clarifies Natco's competitive position for semaglutide in the US market, confirming sole FTF status for certain strengths while noting the absence of any FDA approvals for semaglutide within 30 months.

Asked by Gaurav

Manufacturing Plant FDA Status Updates Direct
Kothur had a warning letter, which got removed. So that got resolved. Mekaguda also got the inspection this year, and we got clearance for that. Chennai got inspected this year, and we're waiting for classification. We believe the observations are procedural in nature. We're expecting the classification in the next 30, 40 days and Vizag formulation facility, I think will get an inspection sometime this year.

Provides a comprehensive update on the regulatory status of the company's key manufacturing facilities, which is critical for product supply and market access.

Asked by Hrishikesh Patole

3 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

Natco Pharma reported a consolidated total revenue of ₹705.4 crores for Q3 FY26, marking an 8.34% increase from ₹651.1 crores in Q3 FY25. The company achieved an EBITDA of ₹216.8 crores, translating to a healthy margin of 30.7%. Consolidated net profit for the quarter stood at ₹151.3 crores, reflecting a solid financial performance.

Adcock Ingram Contribution and Amortization Impact

The company's share of profit from its associated company, Adcock Ingram Holdings, for the period of November 10 to December 31, 2025, was ₹29.65 crores. After accounting for a one-time amortization of ₹18.75 crores, the net profit reflection in Natco's financials was ₹10.9 crores. Management anticipates a recurring quarterly PAT addition of ₹35-40 crores from Adcock, with an annual amortization of ₹10-14 crores, or approximately ₹3 crores per quarter.

Semaglutide Launch Strategy and Market Outlook

Natco Pharma is preparing for the launch of semaglutide (Ozempic and Wegovy) in India, with Ozempic having received SEZ committee clearance and a license expected shortly. The fill-finish capacity for the Indian market is currently outsourced. Management expects the market to be highly competitive with many generics but aims for its domestic business, currently annualized at ₹450-460 crores, to grow by over 20% this year, primarily driven by semaglutide.

NCE Pipeline and eGenesis Investment

The company is actively pursuing five New Chemical Entity (NCE) ideas, with eGenesis (xenotransplantation using CRISPR-Cas9 technology) highlighted as the most exciting. Natco has invested $8 million in eGenesis, which aims to genetically modify pig organs for human transplantation. Management views this as a high-risk, disruptive technology with the potential for a 'home run' in 2-3 years if trials involving 25-30 patients demonstrate success, noting one patient has done well for 6 months and another is progressing positively.

Capital Allocation for Acquisitions and Geographical Expansion

With a net cash position of approximately ₹2,500 crores, Natco Pharma is prioritizing cash for large acquisitions rather than a share buyback. The company is actively pursuing 2-3 acquisition targets, aiming to close 1-2 in 2026, focusing on emerging markets and established brand businesses. Management believes opportunities outside India offer better returns and is building geographical footprints in Canada, US, Brazil, and South Africa, with Western Europe identified as a key market not yet fully present in.

R&D Strategy and Operational Efficiency

The R&D budget allocation was strategically managed in the September quarter, anticipating the decline in Revlimid contribution, with most R&D for the next few months already covered. While R&D spend typically hovers around 8% of sales, the company is recalibrating its approach, including exploring partnerships for complex generics to share expenditure and reduce risk, ensuring continued investment in its pipeline while maintaining momentum.

Manufacturing Plant Regulatory Updates

Natco Pharma provided updates on its four FDA-approved plants. The warning letter for the Kothur facility has been removed, and the Mekaguda plant received clearance after inspection this year. The Chennai plant was inspected this year and is awaiting classification, with observations deemed procedural, and classification expected within 30-40 days. The Vizag formulation facility is also due for an inspection this year, with the last inspection having occurred 2.5-3 years ago.

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