Natco Pharma shares bleed 18.5% as Q3 earnings show disappoints

Natco Pharma share price has eroded 25 percent in the past five sessions.

Shares of Natco Pharma were battered in trade on February 13, plunging as much as 18.5 percent as investors dumped the stock following its disappointing Q3 earnings performance.

The drugmaker's net profit for the quarter gone by dropped 38 percent on year to Rs 132.4 crore in Q3, sharply down from the Rs 212.7 crore that it clocked in the same period last fiscal. Revenue also fell over 37 percent to Rs 474.8 crore in Q3, down from Rs 758.6 crore in the year-ago period.

Alongside, operational performance also sharply weakened, with EBITDA margin eroding  by  a staggering 2,717 basis points to 8.2 percent in the December quarter from 35.3 percent in the same period of the previous year.

A key factor dragging the overall earnings for Natco Pharma was the sharp decline in its formulation exports, which plummeted more than half to Rs 285.8 crore in Q3 from Rs 605.6 crore in the base period. On top of that, domestic formulation sales also saw a downturn, falling to Rs 96.1 crore from Rs 99.4 crore, a year ago.

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For context, export formulations made up 44 percent of Natco Pharma's total revenue in Q3, which is why a sharp decline in the segment weighed heavily on the drugmaker's earnings. In FY24, export formulations contributed 76 percent of the company's total sales. On the other hand, domestic formulations accounted for 15 percent sales in Q3 and just 9 percent in FY24.

At 09.55 am, shares of Natco Pharma were trading at Rs 1,012.50 on the NSE. With the selling in today's session, the stock has extended its downslide to the fifth straight session, losing one-fourth of its value in the period.

Meanwhile, a sharp influx of trading volumes were also seen in the counter, which further exacerbated pain for the stock. As much as 24 lakh shares of the drugmaker changed hands on the exchanges thus far, already nearly five times the one-month daily traded average of five lakh shares.