Natco Pharma Q1 FY27 Earnings Call — Analysis (NSE: NATCOPHARM)
NATCO's Q1 PAT surges 34% QoQ on Adcock flu-season boost and base-business growth; company seeks ₹2,000 Cr for M&A
Result quality: poor — Revenue declined. Management sentiment: cautious.
The take
Q1FY27 Consolidated PAT (normalized) ₹206.5 Cr ( +34% QoQ ) . New guidance — FY27 total gross sales ₹3,300-3,400 Cr .
Results
Consolidated revenue ₹794.4 Cr (-43% YoY, Lenalidomide decline); EBITDA ₹245.7 Cr with margin 30.9% (improved QoQ); PAT ₹206.5 Cr (+34% QoQ ex-one-off)
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Consolidated Revenue | ₹794.4 Cr | yoy · Q1FY27 | |
| EBITDA | ₹245.7 Cr | yoy · Q1FY27 · margin improved QoQ | |
| EBITDA Margin | 30.9% | qoq · Q1FY27 · improvement noted, bps not disclosed | |
| Consolidated PAT (normalized) | ₹206.5 Cr | +34% | qoq · Q1FY27 · excl one-time tax benefit in Q4FY26 |
| Adcock profit share (NATCO share) | ₹84.3 Cr | point_in_time · Q1FY27 · as on 30-Jun-26, 35.75% stake | |
| Domestic formulations revenue | ₹136 Cr | yoy · Q1FY27 | |
| Brazil revenue | ₹178 Cr | +180% | yoy · Q1FY27 |
| Canada revenue | ₹56 Cr | yoy · Q1FY27 | |
| Crop Health Sciences revenue | ₹40 Cr | point_in_time · Q1FY27 · full FY26 revenue ₹138 Cr | |
| Net cash | ₹1,400 Cr | point_in_time · Q1FY27 · approx. as of Aug-26 post Adcock acquisition |
Guidance
FY27 gross sales guidance maintained at ₹3,300–3,400 Cr; PAT guidance maintained at ~₹750 Cr
What management committed to
- FY27 gross sales will be between ₹3,300 Cr and ₹3,400 Cr. — ₹3,300-3,400 Cr, FY27
- FY27 consolidated PAT will be around ₹750 Cr. — ₹750 Cr, FY27
- Domestic formulation volumes will increase by about 25% in FY27. — 25%, FY27
- Crop Health Sciences segment will break even at EBITDA level in FY27. — break even, FY27
- Two product launches with exclusivity in the US during the next financial year (FY28). — FY28
- Carfilzomib US launch on track for calendar 2027; plant upgradation to complete by end of current financial year (FY27).
Key themes
Base business expansion, Adcock synergy, and strategic M&A
Operational commentary
- Adcock stake increased to 49% for ₹1,060 Cr; 3 dossiers already filed for South Africa, with NATCO products expected to launch by 2028, leveraging pipeline and Indian partner relationships.
- Crop Health Sciences demerger delayed by 2–3 months (now expected by March 2027) due to parallel fundraise; segment targets break-even for FY27, supported by 35+ products and next FY's 9(3) limited-competition registrations.
- Domestic formulations base business grew double-digit, led by semaglutide (~₹2 Cr/month brand, plus non-recurring third-party orders); oncology and other segments also strong.
- Brazil oncology portfolio fuelled 180% YoY growth; several meaningful launches planned subject to patent litigation.
- US pipeline: carfilzomib plant upgrade on track to complete by end-FY27, launch in calendar 2027; olaparib trial date in next few months, exclusivity determination pending.
- Innovation asset eGenesis (pig kidney transplant) shows positive long-term survival; management expects exciting updates in coming months.
- Fundraise of up to ₹2,000 Cr approved to pursue two acquisition opportunities (one overseas, one in India) and to cover short-term loans and capex.
Analyst Q&A
Q. Can you provide any colour on the kind of M&A you are evaluating?
We'll come back to you again, my friend. We'll come back again, next caller.
Q. What is the geographic split of the ₹477 Cr export formulation business beyond Canada and Brazil?
I don't have a split. I have the bigger ones. The smaller ones I don't have it on hand, so I do not want to give an incorrect number. I will pass on this.
Q. Is the PAT guidance of ~₹750 Cr still valid, or is there upside risk given Adcock's performance?
Don't annualize it. It is a seasonal bump because it was a flu season. Our guidance still remains around ₹750 crores.
Q. What is the size of the semaglutide opportunity in South Africa and your approval timeline?
The size of semaglutide in South Africa, it's interesting opportunity, but numbers, I don't know either. On top of my head, I don't have that answer.
Research and educational content only. Not investment advice.