Shares of NATCO Pharma plunged nearly 19% on Thursday, February 13, following the announcement of its results for the December quarter of the financial year 2024-25 (Q3 FY25) as the company posted a decline in revenue, profit and operational income.
The pharma company reported a net profit of Rs 132.4 crore for Q3 FY25, down 37.75% year-on-year (YoY) compared to Rs 212.7 crore in the same quarter of the previous financial year. Revenue also fell over 37% to Rs 474.8 crore against Rs 758.6 crore in the year-ago period.
Its earnings before interest, tax, depreciation and amortization (EBITDA) witnessed a sharp 85.5% YoY to Rs 38.8 crore in the reported quarter from Rs 268.1 crore in the year-ago period.
At 11:40 AM, the stock was trading at Rs 997, down 18.20% or 221.80 points from the previous day's close on the NSE. However, in the last one year, the stock has surged over 15% and 46% in the previous five years.
What Led to Natco Pharma’s Earnings Decline?
A key factor behind the overall earnings fall is the decline in export formulation business which is the biggest revenue contributor for the firm. In the December quarter, the export formulation business nearly halved to Rs 285.8 crore from Rs 605.6 crore in the corresponding quarter of previous fiscal. In addition, domestic formulation sales also slipped to Rs 96.1 crore from Rs 99.4 crore in the year-ago period.
Export formulation business accounted for 44% of Natco Pharma’s total revenue in Q3, so a sharp decline in the segment weighed heavily on the drugmaker’s earnings. In FY24, export formulations made up for 76% of the company’s total sales. Domestic formulations made up 15% of sales in Q3 FY25 and 9% in FY24.
