Natco Pharma Limited reported a 25% decline in consolidated net profit to ₹14,185 million for the financial year ended March 31, 2026, compared to ₹18,834 million in the previous year. Total revenue for the year stood at ₹43,759 million, down from ₹47,840 million in FY25. The company's board approved the audited financial results for the quarter and year ended March 31, 2026, at a meeting held on May 29, 2026. Following the results announcement, the company held an earnings conference call on May 29, 2026, to discuss the performance. The transcript of this call, filed under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is available on the company's website.

Quarterly Performance

For the fourth quarter ended March 31, 2026, Natco Pharma recorded a consolidated net profit of ₹2,690 million, a decline from ₹4,060 million in the corresponding quarter of the previous year. Revenue for the quarter stood at ₹8,169 million, compared to ₹12,873 million in Q4 FY25. EBITDA for the quarter came in at ₹2,054 million versus ₹6,144 million in the year-ago period, with the EBITDA margin contracting to 25.1% from 47.7% year-on-year. The financial results include a one-time deferred tax benefit of ₹1,150 million, recognized as the company elected to move to the new tax regime under Section 115BAA of the Income-tax Act, 1961, effective from FY26-27.

The company's associate, Adcock Ingram Holdings Limited, contributed to the quarterly performance, reporting revenue of ₹1,208.2 crore and a profit after tax of ₹102.5 crore. Natco Pharma's share of profit from the associate stood at ₹357 million for the quarter. The acquisition of a 35.75% equity stake in Adcock Ingram was completed on November 11, 2025, for a consideration of ZAR 3,873 million (INR 19,912 million), resulting in the recognition of goodwill of INR 6,494 million.

Key Financial Metrics

The following table summarizes the company's key consolidated financial metrics for FY26 versus FY25:

The quarterly performance metrics are presented below:

Segment Performance

The pharmaceuticals segment remained the primary revenue driver, reporting segment revenue of ₹36,754 million for FY26, while the agro chemicals segment recorded revenue of ₹1,382 million. The agro chemicals segment reported a loss of ₹198 crore for the year. The company recognized an impairment loss of ₹500 million on property, plant, and equipment in the agro chemicals segment during the previous year.

Corporate Developments

The board approved a Scheme of Arrangement for the demerger of the agro chemicals business into NATCO Crop Health Sciences Limited, a newly incorporated wholly owned subsidiary. The scheme has been filed with relevant regulatory authorities for approval. Additionally, the board approved an interim dividend of ₹1.5 per equity share for the quarter ended December 31, 2025, bringing the total dividend for FY26 to ₹5 per equity share. The statutory auditors, B S R and Co, issued an unmodified opinion on the audited consolidated and standalone financial results. The company's total assets stood at ₹1,10,737 crore as of March 31, 2026, compared to ₹86,308 crore in the previous year.

Future Guidance

Management provided guidance for FY27, expecting revenue between ₹3,400 crore and ₹3,500 crore, with a profit after tax (PAT) between ₹700 crore and ₹750 crore. The effective tax rate is expected to be around 25%, including surcharge, under the new tax regime. The company holds a net cash position of approximately ₹2,400 crore at the group level. The associate firm, Adcock Ingram Holdings Limited, is projected to generate revenue of $580 million to $600 million and a PAT of $47 million to $48 million, subject to exchange rate fluctuations. Management indicated that earnings are expected to compound at 15% to 25% annually starting from FY28, driven by exclusivity launches in the U.S., Brazil, and Canada.

Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE987B01026/f9306cfa07fb432a.pdf

Investec has maintained its Buy rating on Natco Pharma while raising its target price to ₹1,220 from ₹1,035, signalling strengthened conviction in the company's growth trajectory. The revised target reflects a positive reassessment of the pharmaceutical firm's core business performance and a broadening set of revenue drivers across key geographies.

Strong Core Business Despite Absence of gRevlimid

A notable aspect of Investec's revised outlook is its acknowledgement that Natco Pharma's core business has demonstrated resilience even without any contribution from gRevlimid. This underscores the underlying strength of the company's base operations and its ability to sustain performance independent of high-value exclusivity-driven revenues.

Key Growth Drivers Across Geographies

Investec identifies several catalysts expected to support Natco Pharma's business momentum. The brokerage points to semaglutide in India as a significant growth driver, alongside new product launches planned across Brazil, Canada, and the US. These multi-geography initiatives reflect the company's expanding international footprint and diversified pipeline strategy.

The following table summarises the key highlights from Investec's updated assessment:

Cash Reserves Offer M&A Flexibility

Investec also highlights Natco Pharma's ₹2,500 crore cash position as a strategic asset, providing the company with meaningful mergers and acquisitions optionality. This financial buffer positions the company to pursue inorganic growth opportunities should suitable targets emerge, adding another dimension to its long-term value proposition.

EPS Estimates Revised Upward

Reflecting an improved earnings outlook, Investec has upgraded its earnings per share estimates for Natco Pharma by 5% for FY27 and 4% for FY28. These upward revisions indicate the brokerage's greater confidence in the company's profitability trajectory over the medium term, driven by the combination of core business strength, new launches, and geographic diversification.