Geojit's research report on NATCO Pharma
NATCO Pharma Ltd. (NATCO) is an India-based vertically integrated and R&D focused enterprise, engaged in developing, manufacturing and marketing finished dosage formulations and active pharmaceutical ingredients and intermediates. FY23 revenue increased 39% YoY to Rs. 2,707 cr, owing to robust sales growth in the US, Canada, and Brazil. EBITDA grew 255% YoY to Rs. 935cr, led by a strong contribution from export formulations. EBITDA margin expanded 2100 bps to 34.6% in FY23 from 13.5% in FY22. Export formulation business registered 74% growth in FY23, with revenues of Rs. 2,063 cr. Brazilian and Canadian subs, backed by strong new launches, have reported robust growth. Crop Health Science Division launched Chlorantraniliprole (CTPR)- based insecticide and pheromone-based mating disruption products. We remain optimistic about Natco’s future profitability, backed by the export formulations, traction in CTPR and Revlimid sales, and recovery in domestic formulations.
Outlook
Hence, we reiterate our Buy rating with a target price of Rs.765 based on 13x FY25E EPS.
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