Natco Pharma Q3 Results Review: Dolat Capital Downgrades Both Rating, Target Price — Here's Why

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Dolat Capital Report

Natco Pharma Ltd.’s Q3 FY25 results were below our estimates, on account of a significant decline in export formulation business with zero Revlimid contribution and lower core margin which was impacted due to higher research and development, higher losses from Agro business and higher fixed cost.

FY26 sales growth will depend on Revlimid price erosion. The company expects a significant drop in FY27 earnings due to increased competition in Revlimid sales post-patent expiry.

We downgrade our FY25E/FY26E/FY27E EPS estimates by 19.4% / 12.3% /37.4%, assuming lower sales and core margin ex Revlimid.

We downgrade our rating to ‘Sell’ from Reduce with a revised target price of Rs 913 at 28 times FY27E P/E.

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