Girish Pai

Nirmal Bang

Equity Bottom-Up

<p>3QFY21 Result Update</p>
<h2>Natco Pharma</h2>
<h3>Domestic sales continue downward spiral</h3>
<p>Natco Pharma’s 3QFY21 net profit was a large miss vs our as well as consensus expectations. Revenue at Rs3,552mn was significantly lower than expectation (NBIE: Rs5,760mn; Consensus: Rs5,500mn.) Revenue was affected primarily due to continued weakness in domestic sales and correction in API sales (as COVID-led supplies tapered off). Export formulation sales declined by 13% YoY. A weak flu season led to lower Tamiflu sales…</p>

<p>2QFY21 Result Update</p>
<h2>Natco Pharma</h2>
<h3>One-offs in revenue and costs</h3>
<p>Natco Pharma reported revenue of Rs8,022mn, which was above our/consensus estimate by 51%/59%. Revenue was up 42% QoQ and 65% YoY. The beat in revenue was led by one-time settlement income for Revlimid in Canada. The API segment grew by 193% YoY but its profit contribution was not meaningful as it was led by low-margin supplies of Tamiflu API to partner ahead of the pandemic season. Natco has received approval for gTamiflu in Brazil…</p>

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<p>1QFY21 Result Update</p>
<h2>Natco Pharma</h2>
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<h3>Demand for pandemic products drives volume</h3>
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<p>Natco Pharma reported revenue of Rs5,634mn, which was above our/consensus estimate by 42%/24%. Growth in the domestic business was driven by Oncology business coming back to an extent. But, disruptions in hospital visits continue. Revenue was up 24% QoQ and 14.4% YoY. Revenue growth was driven by growth in export formulations and API, which was largely driven by pandemic products such as Hydroxychloroquine…</p>
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India

Natco Pharma Limited manufactures a comprehensive range of branded and generic dosage forms, bulk actives and intermediates for both Indian as well as International markets. The Company's product range is constantly expanded through its own R&D initiative, basic research and also through joint ventures, technology transfers and collaborations.

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