Natco Pharma shares dive 20% post Q3 earnings. Details here

Shares of Natco Pharma Ltd fell sharply in Thursday's trade after the company reported a 38 per cent, year-on-year (YoY), decline in its December 2024 quarter (Q3 FY25) consolidated net profit. During the quarter under review, profit after tax (PAT) came at Rs 132.4 crore as against Rs 212.7 crore in the year-ago period. PAT margin was at 20.3 per cent compared to 26.7 per cent in Q3 FY24.

Revenue slipped 18.16 per cent to Rs 651.1 crore from Rs 795.6 crore in the corresponding period last fiscal. Earnings before interest, tax, depreciation and amortisation (EBITDA) decreased by 29.49 per cent to Rs 215.1 crore YoY. EBITDA margin also fell to 33 per cent in Q3 FY25 from 38.3 per cent in Q3 FY24.

On the stock-specific front, shares of Natco tumbled 19.86 per cent to hit a low of Rs 975. The stock saw high trading volume on BSE as around 2.77 lakh shares were last seen changing hands. The figure was way higher than the two-week average volume of 28,000 shares. Turnover on the counter came at Rs 27.86 crore, commanding a market capitalisation (m-cap) of Rs 17,717.55 crore.

"For Natco Pharma, one should see the stock more from the long-term point of view. Investors need to have patience and guts of steel to hold on to this stock, especially in the kind of tumultuous markets that we have witnessed," Vinit Bolinjkar, Head of Research at Ventura Securities, told Business Today.

Technically, the stock traded lower than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). Its 14-day relative strength index (RSI) was 28.59. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's scrip has a price-to-equity (P/E) ratio of 10.10 against a price-to-book (P/B) value of 2.61. Earnings per share (EPS) stood at 98.90 with a return on equity (RoE) of 25.89.

Natco Pharma's business comprises research and development, manufacturing and selling of bulk drugs and finished dosage formulations of FDFs and APIs. APIs business is strategic and serves captive requirements and third party sales. It caters to both domestic and international markets including regulated markets like the United States of America and Europe. As of December 2024, promoters held a 49.62 per cent stake in the company.