Natco Pharma Q1 FY27 Results (NSE: NATCOPHARM)
Signal: Revenue declined
The read
The core trajectory remains volatile: consolidated revenue fell 44.7% YoY to ₹735.2 crore and EBITDA margin was 33.4% versus 43% in Q1FY26, primarily due to lower Lenalidomide revenue, but margin recovered from 17% in Q4FY26 and base segments grew double digits; earnings quality is mixed because ₹59.2 crore of other income was 31.9% of PBT and ₹84.3 crore came from Adcock profit share.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹735.2 Cr | -44.7% | N/A |
| EBIT | ₹198.6 Cr | -65.5% | |
| Net profit | ₹206.5 Cr | -57.0% | |
| EPS | ₹11.53 | -57.0% | |
| EBIT margin | 33.4% |
P&L walk
Consolidated revenue fell 44.7% YoY to ₹735.2 crore and EBITDA fell 61.2% to ₹245.7 crore, while the 33.4% EBITDA margin remained materially above the depressed Q3FY26 base; PAT declined 57.0% to ₹206.5 crore and was supported by ₹59.2 crore of other income and ₹84.3 crore of Adcock profit share.
Segments
International Formulations remained the largest segment at ₹477.1 crore but fell 57.4% YoY from ₹1,120.9 crore, while API, Domestic Formulations and CHS grew 26.8%, 27.5% and 17.6% respectively; the consolidated-versus-standalone PAT gap of ₹131.9 crore was materially supported by Adcock profit share and subsidiaries.
Key positives
- API revenue increased 26.8% YoY to ₹66.7 crore, Domestic Pharmaceutical Formulations increased 27.5% to ₹136.4 crore and CHS increased 17.6% to ₹40.8 crore, demonstrating growth in the base business despite the Lenalidomide decline.
- Consolidated EBITDA margin was 33.4%, recovering from 17% in Q4FY26, although it remained below the 43% reported in Q1FY26.
- Adcock Ingram contributed ₹84.3 crore of profit share in Q1FY27, and Natco increased its stake from 35.75% at quarter-end to 49% in July 2026.
- Natco received tentative US FDA approval for generic Olaparib targeting a stated US market of $1.4 billion.
Key concerns
- Consolidated revenue declined 44.7% YoY to ₹735.2 crore and EBITDA declined 61.2% to ₹245.7 crore because of lower Lenalidomide revenue.
- Standalone PAT fell 83.9% YoY to ₹74.6 crore versus a 57.0% consolidated decline, indicating substantial dependence on associate and subsidiary earnings to cushion the parent-level downturn.
- The company is evaluating an equity or other securities issuance of up to ₹2000 Crores, creating potential future dilution risk if executed.
Earnings quality: includes non-operating other income
Research and educational content only. Not investment advice.