NATCO Pharma Limited (NATCOPHARM) AI Stock Analysis

• Market Cap: ₹159.47B
• Dividend Yield: 0.57%
• Average Volume (3M): 59.22K
• Price to Earnings (P/E): 10.4
• Beta (1Y): 1.23
• Revenue Growth: -3.79%
• EPS Growth: -20.88%
• Country: IN
• Employees: 4,016
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 29.00
• Shares Outstanding: 179,109,860
• 10 Day Avg. Volume: 63,709
• 30 Day Avg. Volume: 59,218
• PEG Ratio: 0.21
• Price to Book (P/B): 1.90
• Price to Sales (P/S): 3.25
• P/FCF Ratio: 10.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: ₹1,048.00 ▲(17.31% Upside)

NATCO Pharma Limited's strong financial performance and positive technical indicators are the primary drivers of its stock score. The company shows robust revenue growth and profitability, supported by a solid balance sheet. Technical analysis indicates bullish momentum, although caution is advised due to near-overbought RSI levels. The valuation is attractive, making the stock appealing for potential investors.

Positive Factors

Revenue Growth

Consistent revenue growth indicates expanding market reach and successful product adoption, supporting long-term financial stability.

Cash Flow Generation

Strong cash flow growth enhances financial flexibility, enabling strategic investments and debt management, crucial for sustained growth.

Profitability Margins

High profitability margins reflect efficient operations and cost management, ensuring competitive advantage and resilience in market fluctuations.

Negative Factors

Gross Profit Decline

Declining gross profit could signal rising costs or pricing pressures, potentially affecting future profitability and competitive positioning.

Increasing Liabilities

Rising liabilities may strain financial resources, impacting the company's ability to invest in growth and maintain financial health.

Capital Expenditures

High capital expenditures could limit free cash flow, affecting the company's ability to fund new projects or manage debt effectively.

NATCO Pharma Limited Business Overview & Revenue Model

Company Description

NATCO Pharma Limited, a pharmaceutical company, develops, manufactures, and markets finished dosage formulations and active pharmaceutical ingredients (APIs). It offers formulations in various therapeutic areas, including cancers of blood, liver, kidney, lung, brain, breast, ovary, etc.; and APIs in various categories, such as oncology, central nervous system, pain management, and CV care. The company also offers orthopedic products comprising bisphosphonates, which are oral and injectable drugs; and gastroenterology products consisting of novel drugs for chronic hepatitis-B and hepatitis-C, as well as contract manufacturing services. In addition, it provides cardiology and diabetology products for the treatment of hypertension, stable angina and CHF. The company markets its products in approximately 40 countries, including India, the United States, and internationally. NATCO Pharma Limited was incorporated in 1981 and is headquartered in Hyderabad, India.

How the Company Makes Money

NATCO Pharma generates revenue through multiple key streams, including the sale of its generic pharmaceutical products, APIs, and biosimilars in both domestic and international markets. The company capitalizes on its extensive portfolio of patented products and also engages in licensing agreements and strategic partnerships with other pharmaceutical companies, which contribute to its earnings. Additionally, NATCOPHARM invests in research and development to innovate and expand its product offerings, thereby enhancing its market presence and financial performance. The growing demand for affordable medications, especially in emerging markets, further supports the company's revenue growth.

NATCO Pharma Limited Financial Statement Overview

Summary

NATCO Pharma Limited demonstrates strong financial health with robust revenue growth, high profitability margins, and a solid balance sheet. The company effectively converts earnings into cash and maintains low leverage, indicating financial stability. However, attention is needed on capital expenditures and managing liabilities to ensure sustained performance.

Income Statement

NATCO Pharma Limited shows strong income statement performance with notable revenue growth of 10.7% from 2024 to 2025. The company's gross profit margin is robust at 65.7%, and the net profit margin stands at a healthy 42.6%. The EBIT margin of 44.3% and EBITDA margin of 57.6% in 2025 reflect efficient cost management and strong operational performance. However, a slight decline in gross profit from 2024 indicates a need for careful monitoring.

Balance Sheet

NATCO Pharma Limited has a strong balance sheet with a low debt-to-equity ratio of 0.04, indicating low financial leverage. The return on equity is impressive at 24.8%, showcasing effective use of shareholders' funds. The equity ratio is robust at 88.1%, emphasizing financial stability. However, a decrease in gross profit and increasing liabilities over the years highlight potential areas of concern.

Cash Flow

The cash flow statement highlights strong free cash flow growth of 67.4% from 2024 to 2025, indicating improved cash-generating capability. The operating cash flow to net income ratio of 0.97 suggests efficient conversion of profits into cash. Furthermore, the free cash flow to net income ratio of 0.76 reflects effective cash management. Despite the positive trends, careful attention to capital expenditures is advised to maintain free cash flow growth.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	43.98B	44.32B	40.02B	27.09B	19.46B	20.56B
Gross Profit	36.18B	37.05B	32.53B	20.54B	13.62B	15.24B
EBITDA	19.73B	21.44B	17.51B	9.67B	2.60B	6.07B
Net Income	16.98B	18.85B	13.88B	7.15B	1.70B	4.41B
Balance Sheet
Total Assets	0.00	86.31B	69.06B	56.57B	51.09B	47.92B
Cash, Cash Equivalents and Short-Term Investments	24.97B	24.97B	17.78B	11.25B	7.60B	8.18B
Total Debt	0.00	2.79B	3.86B	1.76B	4.32B	2.84B
Total Liabilities	-76.12B	10.19B	10.53B	-34.80B	8.46B	6.68B
Stockholders Equity	76.12B	76.07B	58.53B	48.74B	42.64B	41.22B
Cash Flow
Free Cash Flow	0.00	14.28B	8.72B	6.43B	-1.96B	442.00M
Operating Cash Flow	0.00	16.97B	12.12B	8.49B	465.00M	2.99B
Investing Cash Flow	0.00	-14.14B	-10.33B	-4.77B	-53.00M	-1.03B
Financing Cash Flow	0.00	-2.11B	-2.47B	-3.63B	348.00M	-1.86B

NATCO Pharma Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 893.35
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:NATCOPHARM, the sentiment is Neutral. The current price of 893.35 is below the 20-day moving average (MA) of 911.09, above the 50-day MA of 879.16, and above the 200-day MA of 873.05, indicating a neutral trend. The MACD of 6.13 indicates Positive momentum. The RSI at 46.93 is Neutral, neither overbought nor oversold. The STOCH value of 41.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IN:NATCOPHARM.

NATCO Pharma Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NATCOPHARM	76 Outperform	₹159.47B	10.36	―	0.57%	-3.79%	-20.88%
MARKSANS	70 Neutral	₹78.83B	22.41	―	0.44%	14.80%	1.35%
RAINBOW	66 Neutral	₹129.32B	50.95	―	0.22%	9.91%	9.57%
JUBLPHARMA	62 Neutral	₹169.23B	35.23	―	0.46%	10.09%	-19.40%
GLENMARK	53 Neutral	₹566.35B	56.08	―	0.24%	30.27%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

NATCO Pharma Limited Corporate Events

Natco Pharma’s Credit Ratings Reaffirmed Amid Market Challenges

Natco Pharma Limited has had its credit ratings reaffirmed by ICRA Limited, reflecting its healthy financial profile, robust debt metrics, and strong liquidity position. Despite facing competition-induced pricing pressures in domestic and US markets, the company is mitigating these challenges through new product launches and expanding its presence in emerging markets. However, the impending patent expiry of gRevlimid in FY2026 poses potential volatility in revenues and margins. The company’s operating profit margin improved in FY2025 but faced contraction in FY2026 due to increased R&D spending and pricing pressures. The company’s high product concentration, increasing working capital intensity, and scrutiny by the US FDA are noted as key sensitivities.

Natco Pharma Ensures Regulatory Compliance with SEBI Regulations

Natco Pharma Limited has submitted a certificate under Regulation 74(5) of the SEBI (Depositories and Participants) Regulations, 2018, for the quarter ending September 30, 2025. This certificate confirms that securities received for dematerialization have been processed correctly, with updates made to the depositories’ records, ensuring compliance with regulatory requirements. This announcement underscores Natco Pharma’s commitment to maintaining regulatory compliance and transparency in its operations, which is crucial for its stakeholders and market reputation.