NATCO Pharma (NATCOPHARM) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 consolidated revenue was INR 13,906 million, slightly down from INR 14,107 million year-over-year, with pharma export formulations contributing INR 11,265 million and domestic formulations INR 1,070 million.

• EBITDA for Q1 FY26 was INR 6,327 million with a margin of 45.5%; net profit was INR 4,803 million, and EPS was INR 26.84.

• Interim dividend of INR 2 per equity share was declared for the quarter.

• Profit declined year-over-year due to U.S. pricing pressure, higher R&D expenses, and an impairment loss in Agro chemicals.

• Net cash as of June 30, 2025, was INR 34,740 million.

Financial highlights

• Revenue declined marginally year-over-year due to U.S. pricing pressure and higher expenses.

• EBITDA margin was 45.5%, down from 60.5% in Q1 FY25.

• Net profit and EPS decreased compared to the previous year, mainly due to Revlimid price erosion and increased costs.

• Other expenses increased, driven by high-value R&D projects and employee costs.

• Depreciation included a one-time INR 20 crore impairment charge and a separate INR 500 million impairment in Agro chemicals.

Outlook and guidance

• Revenue expected to remain consistent in Q2, with a decline anticipated post-September; guidance of a 20% drop in revenue and profit for FY26 maintained.

• Most of the U.S. quota for key products will be exhausted in H1 FY26.

• R&D expenses to remain elevated in H1, then decline in H2.

• Pipeline includes 28 Para IVs in the US, with over 20 first-to-file opportunities and 13 approved.

• No specific guidance for FY27 yet due to multiple moving parts.