Natco Pharma’s Q2 FY26 sales were below estimates due to lower-than expected other operating income and domestic formulation business, while crop health was better than expected. PAT came above estimates.
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Dolat Capital Report
With all of Natco Pharma Ltd.’s businesses gradually coming back on track, supported by new high-value launches, we see an improvement in the base business margin.
We have also incorporated Adcock Ingram acquisition in our estimates.
With the recent stock correction, we believe there is an upside and upgrade our rating to ‘Accumulate’ from Sell, introduce FY28 earnings with a revised target price of Rs 940 at 23x FY28E P/E.
Key risks:
Higher competition in niche products, higher price erosion in the US and GMP compliance issues.
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