Natco Pharma’s stock took a severe hit on February 13, plunging 18.5% as investors reacted negatively to the company’s weak Q3 earnings report.
The pharmaceutical firm reported a 38% drop in net profit, which stood at ₹132.4 crore for the quarter, compared to ₹212.7 crore in the same period last year. Revenue also declined significantly by 37%, falling to ₹474.8 crore from ₹758.6 crore in the year-ago quarter.
Adding to the concerns, EBITDA margins shrank drastically by 2,717 basis points, slipping to 8.2% in Q3 from 35.3% in the previous year’s corresponding quarter.
The key factor behind the poor financial performance was a sharp decline in export formulation sales, which plummeted by more than 50% to ₹285.8 crore from ₹605.6 crore a year ago. Domestic formulation sales also saw a slight decline, dropping to ₹96.1 crore from ₹99.4 crore. Given that export formulations accounted for 44% of Natco Pharma’s Q3 revenue, the steep fall in this segment significantly impacted overall earnings.
At 9:55 AM, shares of Natco Pharma were trading at ₹1,012.50 on the NSE, marking the fifth consecutive session of decline and a cumulative loss of nearly 25% during this period.
The sharp selloff was accompanied by a spike in trading volumes, with over 24 lakh shares changing hands, nearly five times the one-month daily average of five lakh shares, further adding to the stock’s downward pressure.
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Source: Moneycontrol
