Natco Pharma shares fell as high as 18.5 percent in trading on February 13, as investors sold the firm after its poor Q3 results performance.
Natco Pharma Result: Weak Q3 Earnings Trigger Sharp Decline in Natco Pharma Shares
The drugmaker’s net profit for the third quarter fell 38 percent year on year to Rs 132.4 crore, a steep decline from Rs 212.7 crore in the same time previous year. Revenue decreased by more than 37% to Rs 474.8 crore in the third quarter, down from Rs 758.6 crore the previous year.
What’s Next for Natco Pharma After This Major Stock Slump?
In addition, operational performance deteriorated drastically, with EBITDA margin falling by a stunning 2,717 basis points to 8.2 percent in the December quarter, down from 35.3 percent in the same period last year.
Natco Pharma’s total profitability were dragged down by a dramatic decrease in formulation exports, which fell more than half to Rs 285.8 crore in Q3 from Rs 605.6 crore in the base period. In addition, domestic formulation sales fell to Rs 96.1 crore from Rs 99.4 crore the previous year.
For reference, export formulations accounted for 44 percent of Natco Pharma’s total sales in Q3, thus a severe fall in the category had a significant impact on the drugmaker’s profitability. In FY24, export formulations accounted for 76% of the company’s overall sales. Domestic formulations, on the other hand, accounted for 15% of revenues in the third quarter but just 9% in FY24.
On the NSE, Natco Pharma shares were trading at Rs 1,012.50 as of 09.55 a.m. With today’s selling, the stock has fallen for the sixth consecutive session, shedding one-fourth of its value in the process.
Meanwhile, the counter experienced a significant increase in trading volume, exacerbating the stock’s problems. So far, up to 24 lakh shares of the pharmaceutical have changed hands on the exchanges, which is about five times the one-month daily traded average of five lakh.
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