Hold Natco Pharma; target of Rs 1430: ICICI Securities

ICICI Securities recommended hold rating on Natco Pharma with a target price of Rs 1430 in its research report dated August 13, 2024.

Broker Research

August 23, 2024 / 11:33 IST

hold

26 Aug, 2025 12:21

Volume

Todays L/H

ICICI Securities research report on Natco Pharma

Natco’s Q1FY25 beat was driven by higher sales of gRevlimid while its subsidiaries in Brazil and Canada (INR 1.8bn of sales) also did well. India biz saw an uptick on a sequential-basis while a high base of last year dented YoY growth (- 23%). Crop science growth continued to be marred by stock returns. Management guides for profit growth of 20% for FY25 driven by better market share in gRevlimid (to touch ~33% in H2FY26). Natco has a net cash balance of ~INR 20bn – earmarked for R&D (8–10% of sales), acquisition in RoW markets and dividends.

Outlook

We raise our FY25E–26E earnings by 13–28% to factor in better traction in exports. We lower our rating to HOLD and raise our TP to INR 1,430 on 20x for its base business’ FY26E earnings and NPV of INR 254 for limited competition opportunities in US.

For all recommendations report, click here