{"id":158874,"date":"2024-02-16T06:12:44","date_gmt":"2024-02-16T11:12:44","guid":{"rendered":"https:\/\/44.250.171.167\/?p=158874"},"modified":"2024-02-16T06:12:45","modified_gmt":"2024-02-16T11:12:45","slug":"natco-pharma-ltd-q3-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/natco-pharma-ltd-q3-fy24-earnings-conference-call-insights\/","title":{"rendered":"Natco Pharma Ltd Q3 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Natco Pharma Ltd (NATCOPHARM) Q3 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Financial Performance<\/strong>\n<ul>\n<li>Recorded total revenue of INR795.6 crores in Q3 FY&#8217;24, a 55% growth over INR513.3 crores in same period last year.<\/li>\n<li>Revenue crossed INR3,000 crores year-to-date with one more quarter to go, a major milestone for the company.<\/li>\n<li>Net profit grew over 3.5 times to INR212.7 crores in Q3 FY&#8217;24 from INR62.3 crores in same period last year.<\/li>\n<li>Profit crossed INR1,000 crores YTD with one more quarter to go, a major milestone for the company.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Segment Performance<\/strong>\n<ul>\n<li>Formulations exports including profit share and foreign subs delivered strong growth at INR605.6 crores.<\/li>\n<li>Domestic formulations also grew to INR99.4 crores.<\/li>\n<li>Crop health Sciences recorded revenue of INR14.1 crores.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Guidance Update<\/strong>\n<ul>\n<li>PAT guidance increased from INR1,000-1,200 crores to exceeding INR1,200 crores for FY24.<\/li>\n<li>Sales guidance almost INR4,000 crores for FY24.<\/li>\n<li>Subsidiaries performed well with INR163 crores revenue.<\/li>\n<li>Expect tax rate to remain around 16-17% in coming years.<\/li>\n<li>INR282 crores spent in 9M FY24, not expecting large capex going forward.<\/li>\n<li>Current investments for launches 5-7 years away.<\/li>\n<li>Facilities running optimally but pharma investments have long gestation periods<\/li>\n<\/ul>\n<\/li>\n<li><strong>Acquisition Update<\/strong>\n<ul>\n<li>Looking for large acquisition in emerging markets instead of smaller ones.<\/li>\n<li>Strong balance sheet with net cash position of INR1,800 crores to support deals.<\/li>\n<li>No deal finalized yet but expectation to close something in next 12 months.<\/li>\n<li>Looking for 20%+ return on capital employed.<\/li>\n<\/ul>\n<\/li>\n<li><strong>US Business Performance<\/strong>\n<ul>\n<li>Copaxone, lanthanum, lapatinib and other portfolio doing reasonably well.<\/li>\n<li>Strategy to focus on complex and first-to-file opportunities.<\/li>\n<li>Strong pipeline with semaglutide, olaparib filings done.<\/li>\n<li>Goal to file 2-3 more high-value products in next 12 months.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Domestic Business growth<\/strong>\n<ul>\n<li>Growth lagging at 8-10%, driven primarily by oncology which is 65% of portfolio.<\/li>\n<li>Evaluated acquisitions but found valuations too expensive.<\/li>\n<li>Have some interesting launches planned but not in near term.<\/li>\n<li>Need to acquire assets to expand coverage beyond niches.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Revlimid Outlook<\/strong>\n<ul>\n<li>Good performance in Q3 despite lower quota due to growth in other products.<\/li>\n<li>New allocation starts from March 2024, expects higher contribution in FY25.<\/li>\n<li>Spreading quota through year.<\/li>\n<li>First quota for March launched, expectation to do well.<\/li>\n<\/ul>\n<\/li>\n<li><strong>ROW Subsidiaries<\/strong>\n<ul>\n<li>Canada, Brazil performing very well.<\/li>\n<li>Filing 7-8 products in each subsidiary.<\/li>\n<li>Starting operations in Colombia, Indonesia.<\/li>\n<li>Looking to acquire assets to grow ROW business further.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Supply Chain Impact<\/strong>\n<ul>\n<li>50-60% increase in freight rates due to Red Sea crisis.<\/li>\n<li>Seeing some delays but managing supply of key products.<\/li>\n<li>Raw material prices from China stable for now.<\/li>\n<li>Higher logistics costs impacting expenses.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Agrochem Outlook<\/strong>\n<ul>\n<li>Revenue may end at INR150-160 crores this year, lower than expected.<\/li>\n<li>But good for a new entrant, has potential to scale to INR300-400 crores.<\/li>\n<li>Key is launching first generics and establishing brand with farmers.<\/li>\n<li>Exports to contribute later, focus on building India branded business.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Strategic Investments<\/strong>\n<ul>\n<li>Take minority stakes in startups for capability development.<\/li>\n<li>Invested in CAR-T company to get access to new technology not available internally.<\/li>\n<li>Singapore entity for potential manufacturing or portfolio advantage.<\/li>\n<li>Antidilution clause increased stake to 7% though initial investment small.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Natco Pharma Ltd (NATCOPHARM) Q3 FY24 Earnings Concall Financial Performance Recorded total revenue of INR795.6 crores in Q3 FY&#8217;24, a 55% growth over INR513.3 crores in same period last year. Revenue crossed INR3,000 crores year-to-date with one more quarter to go, a major milestone for the company. Net profit grew over 3.5 [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,5747],"tags":[10169,1115],"class_list":["post-158874","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-healthcare-stocks","tag-earnings","tag-pharmaceuticals"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":171075,"url":"https:\/\/alphastreet.com\/india\/natco-pharma-q1-fy26-earnings-results\/","url_meta":{"origin":158874,"position":0},"title":"Natco Pharma Q1 FY26 Earnings Results","author":"Chirag Gupta","date":"September 9, 2025","format":false,"excerpt":"NATCO Pharma Limited (NATCO) is a vertically integrated, research and development focused pharmaceutical company engaged in developing, manufacturing, and marketing complex products for niche therapeutic areas. 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