NATCO Pharma (NATCOPHARM) Q2 25/26 earnings summary

Executive summary

• Consolidated revenue for Q2 FY26 was INR 1,463 crores (INR 14,630 Mn), up from INR 1,434.9 crores year-over-year, with net profit at INR 517.9 crores (INR 5,179 Mn).

• EBITDA for the quarter reached INR 679.2 crores (INR 6,792 Mn), with a margin of 46.4%.

• Interim dividend of INR 1.5 per equity share declared for Q2 FY26.

• Substantial R&D expenses, Para IV filings, and one-time employee bonuses impacted results.

• Robust US product pipeline with 30 Para IVs and over 20 FTFs, including 13 approved products.

Financial highlights

• Pharma export formulations revenue was INR 1,147 crores (INR 11,470 Mn), domestic formulations INR 105.4 crores (INR 1,054 Mn), crop health sciences INR 52.4 crores, and other income INR 104.3 crores.

• PAT margin for Q2 FY26 was 35.4%.

• PAT for H1 FY26 at INR 998 crores (INR 9,982 Mn); expected FY26 PAT guidance: INR 1,275-1,300 crores.

• Net cash as of 30th Sept 2025 was INR 39,030 Mn; cash post-Adcock acquisition expected at INR 2,700-2,800 crores.

• Substantial provisions made for contingencies, including patent litigation and business expenses.

Outlook and guidance

• Revlimid (lenalidomide) revenue expected to decline sharply due to increased competition; not budgeting significant future revenue from this product.

• Domestic business expected to remain stable, with semaglutide anticipated as a major growth driver upon launch in March/April 2026.

• Base business projected to grow 10-15% annually; years with exclusivity launches may see 50-60% profit jumps.

• Major launches in the U.S. expected from FY27-28 onward; 2026-27 to be relatively muted.

• Demerger of Crop Health Sciences Division underway to unlock value and provide operational flexibility.