Natco Pharma’s profit tumbles by 57% in Q1 FY27 amid declining exports and squeezed margins, prompting plans for a ₹2,000 crore fundraise to support growth.
Natco Pharma reported a sharp drop in profit for the June quarter, as the Hyderabad-based drugmaker faced weaker sales and squeezed margins. Consolidated net profit fell 57% year on year to ₹207 crore in the first quarter of FY27 from ₹481 crore a year earlier, according to the company’s results. Revenue from operations slid 44.7% to ₹735 crore, while earnings before interest, tax, depreciation and amortisation dropped 67.4% to ₹186 crore. The EBITDA margin narrowed to 25.3% from 43% a year earlier.
The strain was most visible in exports, where formulations declined 49% to ₹539 crore, according to the company figures tracked by ICICI Direct. Domestic formulations rose about 9% to ₹108.7 crore, while API revenue increased 38% to ₹63.9 crore and crop protection brought in ₹22.6 crore. ICICI Direct said the weaker operating result also reflected higher other expenses, even as the company had already spent heavily on research and development in the previous financial year.
Natco’s board approved an interim dividend of ₹1.50 a share for FY27 and also cleared a plan to raise up to ₹2,000 crore through a qualified institutional placement or other permitted routes, subject to approvals. The fundraising is intended to give the company more financial flexibility as it continues investing in its business and growth plans.
The latest results come as other Indian pharmaceutical companies have also reported pressure on quarterly earnings, with Dr Reddy’s Laboratories and Cipla both posting weaker profits in the same period. Natco, which makes complex generics, active pharmaceutical ingredients and oncology medicines, sells in more than 50 countries and has previously said its near-term performance is being affected by the absence of major US launches.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
