Natco Pharma's Earnings Slump as Revenue Halves Year-on-Year
The pharmaceutical company's first-quarter revenue fell 44.7% year-on-year, with profit down 57% and net profit margin contracting sharply.
Natco Pharma reported a significant decline in its Q1 FY27 earnings, with revenue nearly halving from the prior year. Profit fell even more sharply, reflecting a major contraction in profitability.
Natco Pharma's first-quarter earnings for FY27 reveal a substantial slowdown, with both revenue and profit falling sharply compared to a strong performance a year ago. The results highlight a period of significant contraction for the pharmaceutical firm after a period of elevated sales.
Revenue for the quarter ended June 2026 stood at ₹735.2 crore, a decline of 44.7% from the ₹1,328.9 crore reported in Q1 FY26. Profit after tax fell even more steeply, dropping 57% year-on-year to ₹206.5 crore. This steeper fall in profit led to a compression in the net profit margin, which contracted by 800 basis points to 28.1% from 36.1% a year earlier. Sequentially, revenue was largely flat, dipping just 0.5% from the previous quarter, but profit declined by 23.2%.
A look at the recent quarterly trajectory shows the volatility in performance, with revenue and profit having peaked in Q2 FY26.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ1 FY27 | PreviousQ4 FY26 | Same quarter LYQ1 FY26 |
|---|---|---|---|
| Period Ended | June 2026 | March 2026 | June 2025 |
| Revenue (₹ Cr) | 735.2YoY -45% | 739.1 | 1328.9 |
| Profit (₹ Cr) | 206.5YoY -57% | 269.0 | 480.3 |
| Net Profit Margin (%) | 28.1YoY -22% | 36.4 | 36.1 |
Key Points
- The trailing twelve-month (TTM) net profit margin stands at 32.9%, indicating the latest quarter's margin is below the recent average.
- The company maintains a robust balance sheet with very low debt (Debt-to-Equity of 0.04) and strong return metrics (ROE of 27.98%).
- Despite the earnings decline, the stock trades at a significant discount to the industry, with a P/E of 7.6 compared to the sector average of 37.4.
With profitability retreating from last year's highs, the coming quarters will be crucial for Natco to demonstrate a path back to sustainable growth.
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· NATCOPHARM
(BSE)
ISIN: INE987B01026
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