Moneycontrol
Aug 09, 2017 03:29 PM IST | Source: Moneycontrol.com

Natco Pharma extends losses, down 11% after Q1 earnings, Bhujanga Rao resigns

Pricing pressure in the US also caused selling pressure in stocks. There was strategic shift of R&D budget from highly competitive US to India and now 50 percent of R&D spend will be focused on India.

Natco Pharma extends losses, down 11% after Q1 earnings, Bhujanga Rao resigns

Moneycontrol News

Natco Pharma plunged more than 11 percent intraday Wednesday despite strong set of earnings in Q1FY18. The sharp fall was led by end of large Tamiflu generic contribution to US business and resignation from director & president of R&D and tech division. The stock lost 4 percent in previous session.

Consolidated profit during the quarter grew by 97 percent year-on-year to Rs 93.7 crore and revenue increased 30.8 percent to Rs 445.3 crore while operating profit jumped 77 percent to Rs 136.7 crore and margin expanded by 819 basis points to 31.93 percent.

The earnings growth was driven by US business but analysts said Q1FY18 was the last quarter for large Tamiflu generic (antiviral medication) contribution to US.

Pricing pressure in the US also caused selling pressure in stocks. There was strategic shift of R&D budget from highly competitive US to India and now 50 percent of R&D spend will be focused on India.

In addition, the company received resignation letters from Dr BS Bajaj, independent director and Dr AKS Bhujanga Rao, Director and President (R&D and Tech) wherein they resigned from the board of Natco Pharma with immediate effect due to their personal reasons, Natco said on August 7.

At 15:08 hours IST, the stock price was quoting at Rs 834.80, down Rs 90.45, or 9.78 percent on the BSE.
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