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Dolat Capital Report
Natco Pharma Ltd.'s Q2 FY24 results were below our estimates on account of lower than expected growth across segments.
Revenue stood at Rs 10.3 billion (below estimate– Rs 11.6 billion), grew by 138.7% YoY and declined by 9.6% QoQ. Ebitda stood at Rs 4.6 billion (below estimate – Rs 5.9 billion), grew by 380.6% YoY and declined by 20.9% QoQ.
Natco Pharma's Ebitda margin at 44.4% (below our estimate of 50.8%), expanded by 2235 bps YoY and contracted by 636 bps QoQ.
We downgrade our earnings per share estimates by 9.6%/12.6% in FY24E/FY25E assuming lower than expected Ebitda margin in agrochem segment and base business. Rolling over to FY26, we maintain 'Accumulate' with revised target price of Rs 858.
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