Natco Pharma's shares fell by 15% after the company reported a significant decline in its fourth-quarter financial results. The company's revenue from operations decreased by 36.5% to Rs 817 crore, compared to Rs 1,827 crore in the same quarter of the previous year. The net profit for the quarter was impacted by a one-time tax benefit of Rs 115 crore, as the company shifted to a new tax regime from FY27.
For the full financial year ending March 31, 2026, Natco Pharma reported consolidated total revenue of Rs 4,375.9 crore, down from Rs 4,784 crore in the previous year. The consolidated net profit for the year stood at Rs 1,418.5 crore, a decline from Rs 1,883.4 crore recorded last year. EBITDA for the quarter saw a sharp decline of 77% to Rs 127.5 crore, with the operating margin contracting to 17.2% from 45% in the corresponding quarter last year.
During Q4 FY26, the formulations export business, including profit share and subsidiaries, was the largest contributor with revenue of Rs 539.6 crore. Domestic formulations contributed Rs 108.7 crore, while the Active Pharmaceutical Ingredients (API) segment reported revenue of Rs 63.9 crore. The Crop Health Sciences (CHS) business contributed Rs 22.6 crore during the quarter. Other operating and non-operating income stood at Rs 82.1 crore.
For the full year FY26, formulations exports, including profit share and subsidiaries, generated revenue of Rs 3,234.5 crore. The domestic formulations business contributed Rs 440.9 crore, while the API segment reported revenue of Rs 234.7 crore. Crop Health Sciences revenue stood at Rs 138.2 crore, while other operating and non-operating income came in at Rs 327.5 crore for the year.
Natco Pharma's decision to shift to a new tax regime from FY27 and re-measure its deferred tax assets related to MAT credit and other deferred tax assets and liabilities resulted in a one-time benefit of Rs 115 crore, as stated in a regulatory filing on May 29.
Background
Natco Pharma has been navigating challenging market conditions, with the pharmaceutical industry facing increased competition and regulatory changes. The company's strategic decision to shift to a new tax regime reflects its efforts to optimize financial performance amid these challenges.
Investors will be closely monitoring Natco Pharma's strategic moves and financial performance in the coming quarters, especially in light of the company's recent tax regime shift and its impact on future earnings.
