NATCO Pharma shares sinks 28% in 2 days on Q3 earnings miss, brokerage downgrade

Shares of NATCO Pharma tumbled as a lot as 10% on Friday to Rs 876.15 on the BSE, extending a two-day droop to twenty-eight% after the corporate posted a pointy decline in third-quarter revenue and brokerage Nuvama Institutional Equities slashed its goal worth citing weak enterprise prospects.

The inventory plunged 20% on Thursday to Rs 975.05, following disappointing outcomes introduced after market hours on February 12.

The Hyderabad-based pharmaceutical firm reported a 37.75% year-on-year fall in consolidated web revenue to Rs 132.4 crore for the quarter ended December 2024, damage by a steep drop in formulations exports. Income for the December quarter declined 37% year-over-year (YoY) to Rs 470 crore, primarily as a result of absence of gRevlimid gross sales—a key generic drug—and sluggish demand in the India and Agrochem segments.

Nuvama, in its newest analysis word, stated NATCO Pharma’s Q3 efficiency was an “all-round miss”, with gross margin at 82.6% however EBITDA margin slipping to eight.2% on account of increased R&D prices, crop well being losses, and remediation bills on the firm’s Kothur facility.

The brokerage agency lower its FY26/FY27 earnings estimates by 6% and 12%, respectively, citing extended weak spot in the India and Agrochem companies and anticipated increased worth erosion in gRevlimid gross sales from H2FY26 onwards. Nuvama slashed its goal worth to Rs 1,100 from Rs 1,440, sustaining a ‘maintain’ ranking on the inventory. Primarily based on Friday’s low of Rs 876.15, the revised goal worth suggests a possible upside of 25.5%.

NATCO Pharma’s shares had closed at Rs 1,216.65 on February 12, earlier than the outcomes have been introduced. The inventory has now declined 40% over the previous six months however stays up 3.6% over the past one 12 months.Analysts stay cautious on the corporate’s near-term prospects. Whereas mid-teens development in the remainder of the world (RoW) markets and a robust U.S. product pipeline may support future income restoration, uncertainties persist round launch timelines and regulatory approvals. Moreover, the Agrochem enterprise continues to underperform, with Q3 income at simply Rs 151 crore, beneath expectations.The corporate, nevertheless, stays well-capitalized, with a web money place of Rs 3,000 crore, doubtlessly enabling mergers and acquisitions that might drive future development. The corporate declared a 3rd interim dividend of Rs 1.50 per share for FY25.

In keeping with Trendlyne information, the inventory’s common goal worth is Rs 1,349, implying a 54% upside from present ranges. 4 out of the 11 analysts overlaying NATCO Pharma suggest a “purchase” ranking, three counsel to “maintain”, whereas 4 suggest to “promote”.

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