Natco Pharma gained more than 18% in intraday trading to climb 52-week highs on Friday. The stock closed with gains of about 15.8% before the end of the trading session. The strong blow in Q3 activity lifted investor sentiments.
Natco during the quarter from October to December 2023 saw its net profit at ₹212.7 crores growing more than three times ₹62.3 Crores in the same period last year.
The contributions form the generics of Revlimid, the multiple myeloma therapy drug.
Natco business model is to target large and blockbuster product launches in the US markets, partnering with other large pharmaceutical companies.
Natco Pharma Q3 earnings at ₹796 crores also grew 55% YoY. However it was a strong up in running performance that lifted the show.
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The Earnings before Interest tax depreciation and amortization (Ebitda) at ₹305 crore grew 140% over ₹126.7 crore in the previous fourth year.
Natco Pharma beat consensus Q3FY24 revenue and Ebitda estimates by 33% and 84% respectively said analysts at Nuvama Institutional shares. This was led by higher overall Revlimit stock while Rest of the world (RoW) sales are also recovering.
Natco Pharma export form revenues 605.6 Crore improved well from ₹333.7 in the previous fourth year although domestic income growth remained silent.
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Natco’s Revlimid generics opportunity is contributing well to growth, as evidenced by the strong performance bump during Q3. As Revlimid’s contributions are likely to continue until January 2026 and with higher volumes, the revenue prospects have also improved significantly.
Looking beyond FY25, a robust US pipeline consists of several Firsts to file generic product launches such as olaparib, semaglutide (sole FTF in 8mg; partnered Viatris) and erdafitinib (own file) note analysts at Nuvama. In addition to opportunities such as those presented by Lonsurf, Yondelis, Calquence and Kyprolis, among others should pay off in the future, Nuvama analysts added.
With Revlimid generic pickup and Natco pursuing complex opportunities such as CAR-T in India, semaglutide, Olaparib, etc. with Revlimid money, the long-term outlook improves said analysts at Nuvama.
Disclaimer: The opinions and recommendations made above are those of individual analysts or trading companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions
Natco Pharma is also investing in Crop Health Sciences and the segment though small is growing and holds promise.
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Published: 16 Feb 2024, 16:21 IST