Natco Pharma Ltd (NSE: NATCOPHARM) Q1 2026 Earnings Call dated Aug. 13, 2025
Corporate Participants:
Unidentified Speaker
Rajeev Nannapaneni — Vice Chairman and Chief Executive Officer
Rajesh Chebiyam — Executive Vice President, Crop Health Sciences
Analysts:
Unidentified Participant
Hrishikesh Patole — Analyst
Nirali Shah — Analyst
Rashmi Sancheti — Analyst
Vivek Kumar Rai — Analyst
Mehul Panjuani — Analyst
Rahul Chaudhary — Analyst
Hrishit Jhaveri — Analyst
Bino Pathiparampil — Analyst
Gagan Thareja — Analyst
Abdulkader Puranwala — Analyst
Saumil Shah — Analyst
Satya — Analyst
Chetan Doshi — Analyst
Prabhu — Analyst
Prishal Burana — Analyst
Presentation:
operator
Ladies and gentlemen, Good day and welcome to Natco Pharma Limited Q1FY26 Post Results Earnings conference call hosted by BNK Securities India Private Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rishikesh from BNK securities. Thank you.
And over to you sir. Thank you.
Hrishikesh Patole — Analyst
Good morning everyone. On behalf of BNK Securities, I welcome you all to the Q1 FY26 earnings conference call of Netco Pharma. Hope everyone is in good health and doing well on behalf of Natco today we have with us Mr. Raju Nanapaneni. Vice Chairman and CEO. Mr. Rajesh Chabian, Executive Vice President, Crop Health Sciences. I now hand over the call to. Rajesh for the management’s opening remarks post which we’ll open the session for Q and A. Over to you sir.
Rajesh Chebiyam — Executive Vice President, Crop Health Sciences
Thank you, Rishikesh. Good morning and welcome everyone to NATCO’s conference call discussing our earnings results for the first quarter of FY26 which ended June 30, 2025. During this call we may be making certain forward looking statements or statements about future events. And anything said on this call which reflects our outlook for the future must be reviewed in conjunction with the risks that the company faces. Like to state that the material of the call except for participant questions is the property of NATCO and cannot be recorded or rebroadcast without NATCO’s expressed written permission. We begin with the call results highlights followed by an interactive Q and A session.
Again, hope all of you have received the financials in the press release that was sent out earlier. These are also available on our website. NATCO recorded consolidated total revenue of 1390.6 crores for the quarter that ended June 30, 2025 as against 1410.7 crores recorded the same period last year. EBITDA for the quarter was 632.7 crores with margins at 45.5%. Net profit for the period on a consolidated basis was 80.3 crores. During the quarter. The business faced pricing pressure in the US product portfolio and incurred increased R and D expenses on account of high value projects.
This is also reflected in other expenses being higher for the quarter. The Board of Directors have declared an interim dividend of 2 rupees per equity share during the quarter. On the segmental split for the quarter I’ll just briefly outline which is also shared the API business clocked 52.6 crores. Domestic formulation 107 crores. Formulation exports including profit share and subsidiaries was 1126.5 crores. Crop health sciences 34.7 crores. Other operating and non operating was 69.8 totaling 1390.6 crores for the quarter. Thank you all. We’ll take the questions now. We can take the questions when you’re ready.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press start and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use answers while asking a question. In order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The first question is from the line of Nirali Shah from Ashika Stock Services. Please proceed.
Nirali Shah
Hi, thank you for the opportunity. I had a question on Revlimid. Just wanted to know is the rev limit contribution this quarter broadly in line with the last quarter or is it higher and should we expect a higher contribution in 2Q.
Rajeev Nannapaneni
We don’t do a split but I think it’s been consistent. We expect it will continue into the September quarter. I think post September quarter I don’t think we see much. It’ll be a decline is what our expectations.
Nirali Shah
So it would be fair to assume that almost entire large, large part of our quota would be exhausted in first. First half only.
Rajeev Nannapaneni
Yeah, I think most of the earnings will get captured in the first half. Yes, that’s correct. Yes. The first half meaning and end of September quarter. Yeah, yeah.
Nirali Shah
And it is. And my next question is on NRC 2694. How many patients have been enrolled so far and by when do we expect last patient enrollment?
Rajeev Nannapaneni
Phase two is ongoing. I can’t recollect how many patients. I think it’s more like 13, 14 patients have enrolled so far. So a lot of the. I think the patients mostly have been done in the US we’re also starting in India now. When do we expect? I think we need to do about, I think 60 to 70 to reach some sort of definite conclusion of where we stand on that particular indication. And this is indicated for late stage head and neck cancer after failure of all the existing therapies. So it’s ongoing. I don’t want to give a timeline now but at least, yeah it’ll take some time. Least maybe we’ll have more clarity as the year goes by.
Nirali Shah
Maybe FY made of FY27 would be a. We can expect some meaningful data readout
Rajeev Nannapaneni
I think. Yeah, I think so. I think that sounds about reasonable I think because the late stage runs and I think if you’re able to demonstrate some efficacy, I think it’ll be interesting. But yeah, we’ll see how things. So we’ll keep you informed. Next caller please. Thank you so much.
operator
Thank you. The next question is from the line of Rashmi from Dalit Capital. Please proceed.
Rashmi Sancheti
Yeah, thanks for the opportunity sir. While you said that rev limit the contribution was consistent this quarter but have you seen a bigger erosion, you know, compared to quarter four or the previous quarter? And that is, is that is impacting our overall EBITDA margin And also related to that, I want to know that in the press release when you said that the business is seeing pricing pressure in the US apart from Revlimid also are you seeing any other pricing pressure in other products?
Rajeev Nannapaneni
I think we’re seeing pricing pressure on Revlimid of course. So I think that’s the reason why there’s been a bit. Are we seeing pressure in other products? They’ve been stable but we also had fortunately other launches that have happened that has also contributed to our profit. So overall, you know, the other business has been stable. I don’t think it’s, I mean we’re doing, you know, extraordinary. You know there’s a increase in the sale but that business has been stable. But yes, Revolver has been seen a decline.
Rashmi Sancheti
Okay. And my second question is related to the crop health sciences. This time we have seen a good crop pick up, you know. So how is the demand picking up and are we on track to achieve that? 140, 150 crore of sales for this year.
Rajeev Nannapaneni
I think so. I think we had a good start. I think we have got good receivable. I think things are settling down. We think that this you know, sale will continue and we are, we’re losing still money. I think we’re still losing this quarter. I think we lost about, about 3, 4 crores, 3.2 crores. So I think with coming very close to break even. So I think we’re almost there. I think we’re doing well.
Rashmi Sancheti
Okay, thank you sir. That’s it from my side.
operator
Thank you. The next question is from the line of Vivek from Inga Ventures. Please proceed.
Vivek Kumar Rai
Hi sir. Thanks for the opportunity. So my Question regarding does you have any breakup of generic and non generic revenue? Hello.
Rajeev Nannapaneni
We don’t do the such breakup. We don’t do breakup like the way you have asked. We do the way we have presented in the. The earnings. We do it.
Vivek Kumar Rai
Yeah.
Rajeev Nannapaneni
Okay.
Vivek Kumar Rai
So actually I’m asking
Rajeev Nannapaneni
at a high level. I can tell you. I mean all the businesses which are sold outside India are all generic businesses. The India business only the mostly the brand business. Otherwise outside it’s mostly a generic business.
Vivek Kumar Rai
Okay.
Rajeev Nannapaneni
And your question?
Vivek Kumar Rai
Yes, my second question is. So there is an investment in ICE Teams series B funding. So why we we didn’t invest on this round during this round.
Rajeev Nannapaneni
Is it ICE Team you’re saying?
Vivek Kumar Rai
Yeah, yeah.
Rajeev Nannapaneni
I assume which company you’re saying which come. Which come icetem you’re saying?
Vivek Kumar Rai
Yeah, yeah.
Rajesh Chebiyam
What’s your question again? It’s not clear what about ICE Team.
Vivek Kumar Rai
So there is a series B funding in the eyes.
Rajeev Nannapaneni
I got his question. Yeah. We are investing my friend. We are investing as per a proportion of our shareholding. I think proportion of shareholding. I can’t remember the number but like 2% of the company. So I think we are, we are keeping in this round also we are I think investing equivalent to keep our shareholding. I have not gone up on it. We are just. We are keeping the shareholding that we have.
Vivek Kumar Rai
Okay. Okay, understood. Thank you sir.
Rajeev Nannapaneni
I don’t remember the number so don’t hold me to it. But I think it’s like it’s a 2, 3 crore round. I think it’s not a large number. I think we are investing. Yeah.
operator
Thank you. The next question is from the line of mayor from 40 cents, please proceed.
Mehul Panjuani
Hello sir. Thank you so much for the opportunity. What would be the impact on Natco Pharma if there was a Pharma tariffs being implemented in the US Worst case scenario.
Rajeev Nannapaneni
There is. I mean there’ll be some impact of course. I mean we are foolish to say there will not be any impact. I think you will see. I mean I’m giving you a general answer. I don’t want to get into the US obviously represents significant part of our portfolio. I speak for the industry. They will be depending on the level of tariff. I think there’ll be a disruption initially and then you know, hopefully we’ll able to pass on some of it to our customers and then we’ll see how things go. But yes, we have to deal with it when we have to.
So far we’re okay but you know, we don’t know what the future holds. You just have to brace for it, right?
Mehul Panjuani
And sir, my second question is what is the reason for the decline in net profit vis A vis the 2024 June quarter?
Rajeev Nannapaneni
I think we already answered that question. I think we have seen an erosion in our portfolio and primarily our U.S. business. And I think primarily driven by rev limit. I think Revlimid has seen some price decrease and it has impacted our profitability.
Mehul Panjuani
Okay. And sir, when would we see a recovery in this one?
Rajeev Nannapaneni
Revlimid over a period of time will decline. I think the market knows this development will see further decline as the year progresses.
operator
Thank you. The next question is on the line of Rahul Chaudhsi, an investor. Please proceed.
Rahul Chaudhary
Good morning sir. Can you hear me clearly?
Rajeev Nannapaneni
Yeah, yeah. Yes, Rahul. Go ahead, Rahul.
Rahul Chaudhary
So this other operating expenses, other expenses have increased disproportionately this year. We had a policy of doing something like 8% of the top line. And you have said high value R and D expenditures happening for the last I think 24 months. So can we not get any color on where we are researching what we are doing? Where would we see the impact? Investors shareholders need to know what is there next year next to next year beyond the semaglutide. Because every minute is history now.
We have made a lot of money. That is my first question, sir. Where are we?
Rajeev Nannapaneni
What we’re doing is. Okay. Yeah, good question, Rahul. I think I’ll try to answer the best I can. So what we’re doing is let us understand our generic business. There are two kinds of products you should do. You should do a product which will not have so much R and D expense but again the upside is limited. Or you do these R and D projects which are 8, $10 million type of expenditure. But if they pay off the returns are also very high. So what we have done Rahul is very deliberately spend.
We had a reasonable amount of surplus as you pointed out. So we use this cash flow to spend on some of these projects. And I think what we have done is we have budgeted some projects we wanted to spend. And the primary reason, the primary product that we are spending on are cancer products where there’s a clinical trial on patients which are very expensive to do. And we’re doing a lot of peptides and oligopeptide type of products. So this is where we see the future of this business. And we’re using the opportunity of our cash flow to invest in these ideas.
If you want me to name the product strategically you don’t name them because until you achieve an outcome where you have a successful filing, you typically name them but I think, I think they’re going well. I think we will name them based on our success. Yeah.
Rahul Chaudhary
Sir, the follow up to this is
Rajeev Nannapaneni
maybe. Yeah, tell me. Yeah, go ahead.
Rahul Chaudhary
So as in like sir, you are not getting deterred by all these tariffs and you are still targeting para profilings only. I mean that is a strategy. We are sticking to that. Apart from the cancer, that trial that we all know is NRC 26948.
Rajeev Nannapaneni
Now talking about NRC 2694 and also generic what do you call cancer products where you need to do trials on patients. So these products, some cancer products, without naming them, you had to spend like seven, eight million dollars. And us, I’m not going to get deterred. Means, I mean, you know, it is what it is. You just have to go with the flow. I mean we have to just see what the policy is going to be. And based on that you readjust your strategy. US is still the most important pharmaceutical market in the world. Especially for these type of products.
It’s 60, 70% of the business. You can’t ignore 60, 70% of business and run your business. I think it is what it is. And regarding ignoring building a business outside us, I think we have made a very bold step. We have bought the second largest company. We’ve taken a substantial stake in the second largest company in South Africa. You know, we spent 2000 crores to diversify our earnings. We believe over a period of time this will represent significant part of our base earnings. In the coming years. I would believe in South Africa will easily be about 15 to 25% of the base earnings.
So we are diversifying away from the US as well. It’s not that we cannot, but again, you know you can’t ignore us at the same time. So you have to play both the cards.
Rahul Chaudhary
My second question is what is the intent behind increase in authorized capital? Sir, what is the plan? Are we looking for investment or are you giving bonus shares?
Rajeev Nannapaneni
No, Rahul, I think I’ll tell you what my thinking is. As of now it’s an enabling resolution. We just want to have the option. I’m targeting another transaction, something like similar to what we did with Adcock. And if the number becomes larger, we just want the flexibility to have equity. At this time I don’t need any money because we have enough money in the books. But if we’re doing another large transaction which can strengthen our base business and we need some flexibility in equity, I just want that option so we’re just taking an enabling resolution from the shareholders so that know we have these sort of flexibility, you know, if need be to, to consummate a larger transaction. Okay,
Rahul Chaudhary
so the cash on books of. 3500 crores is including that 2000 crore investment, right? Sir, there was in the presentation or something.
Rajeev Nannapaneni
No, no, no, no. 3,500 is the cash that we have right now. 2,000 will leave the moment we do this transaction. So the cash will drop to 1500 transaction. There’ll be some accrual of this year’s profit, whatever that number is going to be minus dividend, minus Capex. But yes, I think if you were to say that today, if you were to, let’s say AD for being able to happen today, cash will dip to, will dip to 1500 plus the accrual that we’re going to have this year. Okay.
Rahul Chaudhary
Okay, sir. Kotur plan, sir. When are we going to get it back,
Rajeev Nannapaneni
my friend? Okay, fine. I’ll answer your question. This is your last question. I’ll go to the next.
Rahul Chaudhary
Yes, sir.
Rajeev Nannapaneni
So we had the, so we had two inspections. We had the Mekguda API facility and the Kotur facility. So Mekaguda facility got cleared and we got the Eir Kutur facility also had an inspection. We had multiple observations there. I believe we have answered all the queries. I’m hopeful that we will get a positive resolution. So but again, you know, we have, we have answered them. So they give us 90 days to.
So we’ve answered in July. I think if I collect. So I think 90 days usually get a reply. So we’ve given and addressed all the concerns. I’m hopeful that you know, we get something positive. But again, subject to, you know, what, how things go. But again we are cautiously optimistic that I think we should, I think we’re able to resolve it.
Rahul Chaudhary
Thank you, sir.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press Star and one to ask a question. The next question is from the line of Harshit Zaheri from PI Square. Please proceed.
Hrishit Jhaveri
Congratulations for stable quarter. First question on the acquisition of the South Africa company. What is the outlook for that company going on and how well do we plan and do we plan to increase at stake or this would be the only investment there?
Rajeev Nannapaneni
I, I didn’t hear you well, but I, if I understand your question, what is our strategy with Adcock and how do we increase our shares? Is that, is that the question, my friend? Okay, fine. So. Okay fine. Yeah, so let me address that Question. So I think, see we’ve been looking to diversify our portfolio. I think South Africa is a very interesting market and it’s one of the most exciting markets in the African continent, the most stable country of the lot. And so we got an opportunity to buy a large stake in a very established setup.
Even though it’s a substantial minority, it’s not a controlling, I felt that it was worth. And we get to consolidate the earnings on an associate basis. And second, we don’t have much business in South Africa. We can put all our pipeline that we have in India and South Africa and get a marketing set up which. And a distribution setup which would have taken years for us to build. And we also got it at a very reasonable valuation as you have seen. So it will take some time. I mean the payoff of the investment will take some time.
In the near term I think shareholders will benefit from the their base business that we’re getting. And in the long run I think we will get our pipeline in and we’ll also work with them to improve efficiencies and bring our pipeline not only from natco, from other Indian companies that we have relationships with and so that we can strengthen our portfolio there.
Hrishit Jhaveri
Yeah, okay, understood. Thank you.
Rajeev Nannapaneni
Thank you. Next caller please.
operator
Thank you. The next question is on the line of Bino from Elara Capital. Please proceed.
Bino Pathiparampil
Hi, good morning. Just to follow up on the other expenses. This quarter all put together was around 525 crore. Is this roughly the run rate, quarterly run rate that we should see going forward?
Rajeev Nannapaneni
No, it will not be the quarterly run rate. It will be, it will reduce because lot of the expenses are a lot of one time batch expenses. So let’s say you’re doing a clinical trial or you’re doing an exhibit batch for an expensive product. So there’s been a lot of expense. You’ll see a lot of expensing in this quarter and next quarter quarter but I think it will reduce, I think starting from the December quarter.
Bino Pathiparampil
Understood, Got it. Thank you very much.
operator
Thank you. The next question is on the line of Gagan from Ask Investment Managers. Please proceed.
Gagan Thareja
Yeah, good morning. So the first question pertains to, you know, your, your comment on the increase in authorized capital. You, you said you are looking for another significant transact. Can you give us some idea of to whatever degree you’re comfortable sharing of whether this is a manufacturing related transaction or a front end or further increase. In ad cock stake?
Rajeev Nannapaneni
Good question. We are trying for something that is stable and which sentence our base business and Gives us more strength in the market that we are operating in. I mean, obviously all these are bound by confidentiality and these are not done right. So we have not reached a stage where I can talk about it. But we will do something that strengthens the base business and gives us strength in a market either that we are operating in or in a market that we are not present in. So that gives us immediate accretive earnings.
I think that’s what we are looking at. I think that’s the nature of the transaction. The best I. The best I could answer at this.
Gagan Thareja
Okay. All right. All right, I have one more.
Rajeev Nannapaneni
Please, go ahead.
Gagan Thareja
Yeah, so on the ADOC, you also indicated that, you know, it could be 15 to 25% of the base earnings. When you say base earnings, you’re referring to the cumulative path of natco closing FY25. And if you could give us some idea of, you know, because
Rajeev Nannapaneni
I’m talking about. No, my friend, it is packed for 27. I’m not, because it’s a year intake. Close. I’m assuming a scenario where rev limit is gone. I’m assuming only, y ou know, we have all our earnings are without rev limit. And I’m assuming that, you know, you know, for the next financial year, non disfinantial.
Gagan Thareja
Right. And Adcock has had two or three. Rather stable sort of years, if you look at the. I mean, if one goes by the statistics which you put out on your presentation. So I mean, do you foresee, you know, a change in the growth trajectory post you coming in and to what degree?
Rajeev Nannapaneni
I think we are hoping we’ll bring some value. I think certainly, I hope that we could improve those earnings. And also we’re hoping that we could bring some of our pipeline from India and use our relationships that we have with other companies and strengthen the pipeline. I think that’s the journey that we want to go through. I think we strongly believe that we can add a lot of value to the asset and it’s a great asset. It wasn’t for the transaction, we wouldn’t have had access to this sort of asset. And so we’re hoping. Yes, I think that’s the expectation. Yes, you’re absolutely.
Gagan Thareja
Okay, thanks. I’ll get back again. Thanks for taking. Okay, thank you.
operator
Thank you. The next question is on the line of Abdul Gader from ICICI Securities. Please proceed.
Abdulkader Puranwala
Yeah, hi, sir. Thank you for the opportunity. So in terms of India business, you know, where are we in terms of launching Semaglutide in India and then from the next two, three years Perspective, how should we look at this portfolio?
Rajeev Nannapaneni
Semoglutide? I think we’re on track. We hope to be there in the when the market formation happens next year. I think that’s our expectation. Subject to, you know, regulatory. Yes, this is one hour, but, you know, so we have our own products. So I think all our dozing is completed. First phase is complete for readout. I think by November, December we’re expecting and hopefully it will be on track in phase one. So what you call in the phase one launch with all other agendas next year. So I’m hopeful that the product will do well.
Abdulkader Puranwala
Got it. And so then secondly, I heard your opening remarks on, on your agricam venture. But then from a product standpoint, I think in the past you’ve talked about couple of more launches to strengthen this business. So, sir, I mean, is FY26 the year where we see those launches or 2728 where we expect some meaningful traction getting built up Here.
Rajeev Nannapaneni
We have launched a couple of new unique products. I think there’s one product called glans, which is I think the only fungal product other than Innovator that is there. And then. Yeah, Abdul. So actually this season we’ve launched about five products and a couple of herbicides and then there’s fungicide and insecticides as well. And these are all limited competition. So the idea here is, you know, you have a few products but also introduce like as Rajiv was just mentioning, this product, fungicide called brand, which was launched earlier, late last year, that’s doing fairly well because I think part of the reason why our loss dropped is because the gross margin has been higher on the newer launches.
And I think we’re on track to reach the breakeven levels. Next question.
operator
Thank you. The next question is from the line of Somil Shah from Bharat Investments. Please proceed.
Saumil Shah
Yeah. Hi, Rajesha. Good morning. I wanted to know more on your acquisition of Adcock. I mean, by when this transaction will be completed and how much it will add to our bottom line. So I think they are doing a yearly rendezvous of around 5,000 crores. And we hold about 35% in that.
Rajeev Nannapaneni
Yes. So we expect the transaction completed in the next two to three months, depending on regulatory clearances and all the other requirements regarding the consolidation. I think they’re doing turnover of about $530 million. I think I had to click number exactly based on the exchange rate and they have a pack of around 67 or 48 million. Yeah. So we were able to consolidate 35 of that number. So 15 million I think depending on.
Saumil Shah
Okay, so total Pad is around 48 million.
Rajeev Nannapaneni
You can consolidate 35% of the pack, my friend. Sorry, say that again.
Saumil Shah
Yeah, so. Yeah, yeah. So I just wanted the yearly pad is around 48 million USD.
Rajeev Nannapaneni
Just one second now let me pull up the numbers. I’ll be more precise. Turnover is last year was 536 million. And that pat, I can’t, I can’t remember exactly but I think it’s around 46 or 47 million. So depending on the exchange rate that we’re taking. So your question, how much of the pat we can consolidate? We can consolidate 55% of the package.
Saumil Shah
Okay.
Rajeev Nannapaneni
35.6, 1075. So let’s say for your mathematical simplicity, 50 next year profit, let’s say is $50 million. For mathematical simplicity, 35.75 of that is what you can consult. So.
Saumil Shah
Understood.
Rajeev Nannapaneni
It will be like, you know. Yeah, okay.
Saumil Shah
So I had a confusion. Yeah, so can I, can I complete my question? I had a confusion on, on your page seven of your presentation. Yeah, yeah. On the page seven of your presentation I think you mentioned financial year June 24th. Adcox has done a path of 814 million ZAR. That is 45 million approximately. And on the, and again after that we mentioned on December 24 they have done a pad of 66 level 7 million jar. So this December 24 year and we have done 6 double 7 million. Sir, is it 38 million USD?
Rajesh Chebiyam
Yes,
Rajeev Nannapaneni
EBITDA net profit is 22.
Saumil Shah
So that is yearly profit 22.
Rajeev Nannapaneni
What I can read from my presentation H1.
Saumil Shah
Okay, okay, okay. That is only half year. Okay, okay. So in Africa it’s June closing.
Rajeev Nannapaneni
They have not announced their June numbers yet. No, they’ve not announced numbers yet.
Saumil Shah
Okay. Okay.
Rajeev Nannapaneni
So this every six months and their financial ends in June. So the June numbers not. They’ve not announced it. They’re not announced yet.
Saumil Shah
Understood, Understood. Okay sir, thank you. That’s it. From my side.
operator
Thank you. The next question is from the line of Rashmi from Dalit Capital. Please proceed.
Rashmi Sancheti
Thanks for the follow up. Just one question. This quarter the depreciation was pretty high. So does it as any impairment charges or anything?
Rajeev Nannapaneni
It does. Actually I think we had a 12 crore impairment charge of an equipment that we block and efficiently that we’re not using. So I think yes, Normally it’s around 43, 44. It was 50 something this time. So. So I think it has come. It’s come From, I think 12, 13 crores from.
Rashmi Sancheti
Okay, okay, thank you, sir.
operator
Thank you. Participants who wish to ask a question may please press task and one at this time. The next question is on the line of Satya from ich. Please proceed.
Satya
Hello, I’d like to know in the year 27, when development is not there, what kind of revenue can we expect on yearly basis.
Rajeev Nannapaneni
In the year financial 26, 27 years.
Satya
Yeah, next year.
Rajeev Nannapaneni
We’re not giving guidance for next year. I’ll not give guidance right now. I think I need little more time. Maybe I think end of the year. I think I’ll give you some guidance as of now. No, I don’t want to give a guidance. It’s too early for me to give a guidance. I think there are a lot of moving parts that we have in our business. I have clarity maybe, I think maybe early, maybe after, maybe next year. I think I’ll give you more clear guidance because a lot of things happening in our company transactions order, you know, so we’ll have more clarity next year.
Can I talk about it next? Not at this time. I don’t want to talk.
Satya
Okay, thank you.
Rajeev Nannapaneni
Yes, thank you. Okay, thank you. Thanks.
operator
The next question is from the line of Abdul Gader from ICI Securities. Please proceed.
Abdulkader Puranwala
Yeah, hi. Thank you for the follow. Yeah. So just one question on your other expenses which was, you know, slightly inflated because of R and D to call out for the number you know, which was in excess in this quarter and for your annual guidance if you could provide of how should we look at R and D for the rest of the year?
Rajeev Nannapaneni
I think a lot of the major R and D expenses are in the this quarter and next quarter. I think we have planned it and budgeted in a way that I think June and September quarters will have bulk of the R and D expenditure based on the high value products that we have. So it will decline. I think you’ll see a decline in December quarter and the March quarter. I think that’s my expectation.
Abdulkader Puranwala
Understood. And so one final one if I may. So what would be your cash balance at the end of first quarter.
Rajeev Nannapaneni
As of today? Right now it’s about 3500 crores with the cash. And this assumes that the Adock transaction has not happened.
Abdulkader Puranwala
Got it. Thank you.
operator
Thank you. The next question is from the line of Gagan Tareja from US Investment managers. Please proceed.
Gagan Thareja
Yeah, thanks for taking the follow up. I just wanted to understand, does your deal on Adcock give you provision to raise your stake further and is the current promoter, you know? I do not know anything about the current promoter. Can you give Some idea. Are they PE or are they founding promoters?
Rajeev Nannapaneni
Okay, we have an option to increase our stake if they, we have first rate of refusal. So if they want to sell they should ask us before we can have the right to increase. But the deal right now is only 35.75. I don’t think at this time they are interested in selling but however if they change their mind we have, we have the right to ask for that stakeholder stake. So. But still it’s such an attractive company. We said no, we’ll do this deal even as though it’s a substantial minority.
Your second question was what. Who is, who is the promoter? It’s a very well known South African conglomerate. They have multiple businesses. It’s called Bidwest. I think they have lots of. Look, it’s a very large South African conglomerate. I think they have multiple businesses. You can look them up online. So they’re well known. So have a look.
Gagan Thareja
Just one final question and again this is, you know when you say that ADCOCK can be 15 to 25% of let’s say FY27 profits, I mean if you extrapolate on 20 million which could be the profit for you, that’s around 160, 170 crores. Are you saying that Natcos FY27 profits could be, you know, 5 to 6x of that number? I mean, I mean by inference that would seem to be the conclusion.
Rajeev Nannapaneni
I would believe so. But anyway I, that’s why I do want to answer that question directly. Give me some time on this because I, it’s. I need some more time on it. I just need more clarity on my business. So I would like to give a. Generally I give a guidance when the year, before the year starts. So I would request you to hold on till then. Yeah, I’ll give you more definite guidance I think closer to the end of the financial year. Yeah,
Gagan Thareja
thanks. Thanks. And I’ll get back in the queue. Thank you.
operator
Thank you. The next question is from the line of Narali Shah from Ashika Stock Services. Please proceed.
Nirali Shah
Yes, thank you for the follow up. Just wanted to know that since we are saying that Revlimid will see pricing pressure as the year progresses but do we see any scope that in volume terms we’ll be able to capture much bigger share of the market?
Rajeev Nannapaneni
I don’t have an answer to that question. I don’t want to answer that question because I don’t know what the future holds. That’s why I said I’m holding off on giving the items for everybody’s Pressing me on to answer the 27th of March number. That’s why I’m avoiding it because I don’t know. So there’s so many moving parts and a lot’s happening in our portfolio and you know we have the semaglutide launch, we have other launches in the RW business and we need clarity on how things are. So I would request, I would not at this time, I would just, just wait.
But you know, we’ll see how things are. I think maybe by end of the year I think we’ll have clarity.
Nirali Shah
Understood. Yes.
operator
Thank you. The next question is from the line of mer Panjuani from 40 cents. Please proceed.
Mehul Panjuani
Sir. Thank you so much for the clarification on this development. One question, sir. How much of your portfolio is contributed by agrochemicals right now?
Rajeev Nannapaneni
Who’s portfolio? Natural portfolio, sir.
Mehul Panjuani
Yeah, herbicides and insecticides. What do you mean
Rajeev Nannapaneni
right now? I. This quarter as of now I think it’s there in the segment numbers. I think it’s 34.7 crores out of the.
Mehul Panjuani
Okay.
Rajeev Nannapaneni
Our of our revenue is agrochemical.
Mehul Panjuani
Yeah, yeah. Okay. Okay. And what about sir, this regulatory approval which are required for the South African we will be knowing in two to three months. So are they depend on Indian as well as South African regulations or, or just the South African regulation?
Rajeev Nannapaneni
I think India I think we have sorted. I think there’s not much, I think we have enough cash so we’re not borrowing much. So I think we have the bank limits. We’re given all the guarantees that are required to get the transaction done in South Africa. Also we don’t, I mean we had to delist the company. So that’s why there’s a process for it. We’re running the process and we believe that we won’t have so many. Obviously we need to go through the hoops but we don’t face too many challenges because we believe it’s a majority South African owned.
There’s no majority foreign control. Right. So. And the existing controlling shareholder, his shareholding is not changing anything. So. So we’ll continue in a majority South African company. And so we don’t foresee too many challenges for that particular reason. And but anyway, anyway I think until it’s not done, it’s not done. Right. So.
Mehul Panjuani
Right. So my last question is about someone fellow, fellow participant asked about. I don’t know what is istem. So if you can elaborate or throw some light on it.
Rajeev Nannapaneni
Okay fine. Our presentation has it but I’ll just tell you what’s going on in our NC and SLNG investments. So we have multiple investments. I think our presentation reflects about five ideas that we have. So I stem is one investment we have done and they are working on a particular disease called dry age related macular degeneration. So the gentleman asked us how much you have invested? We invested about 1 million and he asked me whether we are investing. They are raising a. Are we investing in that? I said we are investing and we are keeping our shareholders.
Our shareholding is like I think I don’t remember the number but it’s like below 2, 3% type of shareholding. So that is istem. In addition to that I think some of the other investors asked us about NRC 2694 which is one of our other NCE idea and I told them where we were on the clinical trial and of five investments and the biggest, I mean one I think is E Genesis which is $8 million that we invested from our Canadian entity which does transplant of genetically modified pigs into humans. So they had some very interesting data and they had some.
There’s one particular patient who has done extremely well and still doing well. So that is probably the most exciting of among our, you know, NCE cell engine investments at this.
Mehul Panjuani
Thank you so much. Really appreciate your elaborate answer. Thank you so much.
operator
Thank you. Before we take the next question we would like to remind participants that you may press start and one to ask a question. The next question is from the line of Raul Chaudhry an investor. Please proceed.
Rahul Chaudhary
So regarding semaglutide, you had said earlier that stylus is doing the API and you were using a fill finish also. So sir, that is the same thing that is for the domestic. Are we gonna for the domestic launch only because there’s some articles.
Rajeev Nannapaneni
Wait wait, wait wait wait wait Rahul. Wait, wait wait. You made a wrong assumption. Just one second. Still is doesn’t Stellis is called one source now Second they don’t make the API. They make. They did and they make the what you call the fill and finish API is from outside not from one source. Okay so.
Rahul Chaudhary
Okay so what I was asking is that post so supposed you know when we get our approval people were some media outlets are saying that it’s going to crash to 3,000 rupees a month kind of a thing. So will we not lose competitive edge if we keep if we outsource everything or do we have the margins to play in that that kind of a pricing also
Rajeev Nannapaneni
Rahul, honestly there are so many moving parts in Samarz Low tide we could Have a one hour call discussing that. Okay, so there are a lot of things that are there. Let’s get some regulatory clarity and get our approval. And I can. There are a lot of moving parts in it. This call won’t be enough to explain to you all the moving parts. So my answer to you right now is a lot of moving parts and we have. I think I have enough clarity on how to deal with this product and how to add some ideas and strategies and hopefully they’ll work out.
And second issue on the pricing and all, I think it’s too premature to talk about. It’ll be too much about that.
Rahul Chaudhary
So are we getting. There’s this drug called pomalidimide something Pomalidomide. Do we have a. Like a filing there also? Paraphor.
Rajesh Chebiyam
Us. We do.
Rajeev Nannapaneni
Yes. Us. We do. Us. We do. Yes.
Rahul Chaudhary
So we haven’t sold the product yet. So we are still waiting.
Rajeev Nannapaneni
We have a. We have a full approval. But yes, I think once the launch will happen we will talk about it. But at this time we kind of. We don’t have clarity on the launch date. But yes, once it happens we’ll talk about it
Rahul Chaudhary
in the sense we have
Rajeev Nannapaneni
confidentiality. The launch date.
Rahul Chaudhary
Okay. But we have. We don’t have an agreement with the innovator like how we did in.
Rajeev Nannapaneni
We have. We have. We have. We already have. We already have. We have a settlement. We have.
Rajesh Chebiyam
This is there in our presentation. Investor presentation.
Rajeev Nannapaneni
We already have settled. We have a. So to answer your question, Rahul, we have a settlement. We have an approval.
Rahul Chaudhary
Yes sir.
Rajeev Nannapaneni
The launch date is confidential but it will be disclosed closer to the time. Yeah.
Rahul Chaudhary
Yes sir. Thanks.
Rajeev Nannapaneni
Okay then. Thanks.
operator
Thank you. Next. Take the next question from the line of Chetan Doshi from TM Financial. Please receive.
Chetan Doshi
Yes. Thank you for giving me the opportunity. I have two questions. One is this total expense is almost 50% of our turnover. So R D expense. You said in the earlier conversation that is going to reduce. But instead of asking the target for this year, can you just give us a brief idea as to what will be the total expense of the current year. And second question is regarding the South Africa acquisition. Can we supply in our brand? The question is related to if US Puts tariff on India and South Africa channel is attractive then can we pass on the drugs to South Africa unit and they can export to us?
Rajeev Nannapaneni
It doesn’t work like that, my friend. I can’t. I don’t know how to answer your question. Every country has its own regulatory approval and that’s how it works. So I. And regarding the question that you asked. Generally the way product is produced that from there only you need to export. So there are rules on country of origin or not. So I don’t know whether
Chetan Doshi
that doesn’t work. That doesn’t work. And what about the expenses?
Rajeev Nannapaneni
From what I can see, it doesn’t work. I don’t think so.
Chetan Doshi
Okay. Okay. Okay. And regarding the current year expenses. How much you plan to spend in the current financial year. Can you just give us a brief idea?
Rajeev Nannapaneni
I don’t have it. Top of my head. My friend. What I can only tell you is that you know that it is on the higher side these two quarters. Because we have a lot of high value products and it will decline next quarter. Precise numbers and all. I’m sorry I don’t have the numbers on. I don’t have
Chetan Doshi
one last one line question. Natco. Is higher price underpriced or it is fairly priced? How do you look at it from so many years of operation?
Rajeev Nannapaneni
Good question. I. I would believe. I think see we have a very good return on capital. I think we have always got the big jackpots right. And I just do what we are. What is beneficial to our company and valuation is left to you guys. You value it the way you value it. I have no comment on it. I think if you look at the. Portfolio that we have and our pat and our portfolio and our strategy I think it is as efficient and as interesting and as exciting as any other industry today. I think that’s all I can tell you. Yeah.
Chetan Doshi
Higher price. Yes or no?
Rajeev Nannapaneni
I can’t answer that question. It is for you to judge, my friend. I can only do. I can only tell you about the business strategy and we’ll take it from there. Yeah. Thank you. Next. Next color.
operator
Thank you. The next question is from the line of Vivekam Indga Ventures. Please proceed.
Vivek Kumar Rai
Hi. Thanks for the follow up. Sir, my question regarding guidance for R D. As you mentioned during previous call. It will be 400 crore for FY26. So how can we see for the coming quarter or FY26 overall.
Rajeev Nannapaneni
It will be a little bit on the higher side. But I think it will decline in exporter exact numbers and all. It’s very hard for me to tell. I’m not prepared for it. I. I think there are too many moving parts. Give you more clarity. I think next quarter. But as of now I can’t answer that question.
Vivek Kumar Rai
So. Sir, we are going to utilize 400 crore on R D during the year.
Rajeev Nannapaneni
I would believe so. Yes. I would believe so yes,
Vivek Kumar Rai
answer. My second question is regarding this tariff. How much effect do this tariff have on our export formulation as a percentage of total portfolio? There will drop then approx. How much will be dropped like that?
Rajeev Nannapaneni
I mean it all depends if it. You’re asking a very hypothetical question but if there were to be a tariff, I think we will have the near term will have some impact of course because you’ll have contracts and pricing and how much you’re able to pass on immediately. I mean there’s always, you know, you know there’ll be some concern but I think the long run we would like to pass it on to our customers because the margins that we work on most of our products are very low. So there’ll be some little bit of disruption initially but I think everything, I think after a while.
Vivek Kumar Rai
Oh, thanks.
operator
Thank you. The next question is from the line of Somil Shah from Paris Investments. Please proceed.
Saumil Shah
Hi, thanks for allowing me a follow up. So in the previous call I think you mentioned that we are estimating a 20% drop in revenue and 30% drop in profits for this year. So do we still hold on to that or to the acquisition of South African company? We would like to revise it.
Rajeev Nannapaneni
I think for now I feel like holding on to it. If there’s any change, I’ll let you know. But as of now I think see again these are all estimates my friend. I, you know, I can only tell you what we see. We asked me, I will ask this question and I gave this guidance but as of now it seems all right. I think so, yeah. Give a few basis points this way, that way. Yeah, there’ll be some impact. But. Yeah, but around I think. Whereabouts. Yes, I think that’s what looks
Saumil Shah
okay. Okay. And since the rev limit prices are dropping. So how is the current quarter, I mean shaping up? Is it similar to the previous. I mean how can we look at the second quarter? Would it be similar to the first quarter? It will be further downward.
Rajeev Nannapaneni
I don’t, I mean I’m hoping it will be similar but again I will only have clarity when the quarter ends. I think a lot of moving parts in this business so I think that’s my expectation. But again I subject myself to correction based on how things go out. But you know, but we’ll see how things.
Saumil Shah
Okay, so there is a price erosion further compared to the first quarter.
Rajeev Nannapaneni
I don’t know my friend. Can you give me some time on this? I think we’ll, we’ll have more clarity I think when may announce this Q2 numbers. Yeah.
Saumil Shah
No problem sir. Okay. Thank you. Thank you.
operator
Thank you. The next question is on the line of SAA from I. Please proceed.
Satya
I just wanted to ask any update on the case with Rosh. Hello.
Rajeev Nannapaneni
Can you repeat the question? I didn’t understand what. Please repeat the question.
Satya
I just wanted to update on the case that was going on with the Rosh.
Rajeev Nannapaneni
Okay. So as you’re aware my friend I think single bench we won the then they appealed it in two bench in Delhi High court. We’re awaiting verdict. We are ready to launch. We already have the product ready. We have everything ready. We’ve already stated our pricing. What do you call strategy but we’re all waiting for the to get clarity of launch from the double bench of Delhi High court. So once we have clarity I think. We’Ll let you know
Satya
10 days timeline like. Like the second third quarter we can see them sales from then.
Rajeev Nannapaneni
You’Re saying ask me that. I think from what I was told I think we’re expecting verdict any moment. I think it’ll happen anytime. I think for the verdict it’s been already. I think already a few months ago. So I think. I think any moment you will hear in the next could be next week or next month depending on whenever the judge gives the order.
Satya
And there’s one last question right. If everything goes well as stand you are expecting right. What kind of revenue are you targeting from this particular medical.
Rajeev Nannapaneni
It all depends. I think we have the first more. Advantage will be nice. Yeah but again we have to see how who else also comes because so there are a lot of moving parts. Once the judgment comes it happens. I think we can give more clarity. I think then I’ll have a better idea of where things are as of now I would like to say interesting opportunity but again I would like to wait for clarity from the code before we actually start talking about.
Satya
Okay. Can I compensate the development.
Rajeev Nannapaneni
Thank you.
Satya
Thank you.
operator
Thank you. The next question is from the line.
Rajeev Nannapaneni
Go on to the next.
operator
The next question is from the line of Pravo an individual investor. Please proceed.
Prabhu
Hello. My question. Hello.
Rajeev Nannapaneni
Yeah.
Prabhu
How many R and D products are you planning to file in the US in the current financial year and within this how many would be in the peptides and the oligo nucleotide space.
Rajeev Nannapaneni
Typically depends on how things go. But typically we file about seven to eight products. That’s our run rate usually and usually we target about one or two products in the oligo space.
Prabhu
Thank you. Do we. Do we have a plan do we have a plan to extend peptides and. Oligon Nucleators to Canada and Brazil as well.
Rajeev Nannapaneni
It depends on some licensing agreements. Like some of them we are tied up with other partners. Yeah. And yeah, sometimes we do extend this depending on the situation.
Prabhu
Thanks. Thank you.
Rajeev Nannapaneni
Thank you. Thank you. Last question. Last caller, please. Thank you.
operator
Due to time constraints, this will be the last question from the line of Vishal Burana and Peter and investor. Please proceed.
Prishal Burana
Hello, sir, I want to know about with respect to diversification of business, about the business strategy for the market in India and the products planned to be launched in India this financial year.
Rajeev Nannapaneni
If I understood your question correctly, you asking me what the business strategy for India is? Is that correct, my friend? Is that what you said? Your voice, I couldn’t hear.
Prishal Burana
Yes, sir. Yes, sir. Yes, sir. Yes, sir.
Rajeev Nannapaneni
Okay, fine. So India and all, I think we have expectations. I mean as the two products have been mentioned in the call, I think reside plan subject to the court outcome, semaglutide subject to regulatory clearance and other issues that are there with the product. So I think these are probably one of the more high value launches. But the portfolio is doing well. I think as you have seen the numbers growing around 7, 8% a year, the base portfolio. But if the new launches come in, then obviously the growth will be much higher. But I’m actually very optimistic that domestic should do very well.
And so we’ll see how things go. Yeah. Thank you. Thank you, sir. Thank you so much.
Prishal Burana
Thank you, sir.
Rajeev Nannapaneni
I appreciate the time that you guys spent talking to us and thank you. Yeah,
Rajesh Chebiyam
thank you. Thank you all.
operator
On behalf of BNK securities limited. That concludes this conference. Thank you for joining us. And you may not disconnect your lines.