Natco Pharma share price rises 8% to 52 week high post Q4 results

Tanushree Jaiswal Tanushree Jaiswal

Last Updated: 28th May 2024 - 12:37 pm

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Natco Pharma's share price surged nearly 8% in morning trading following the release of its strong Q4 results.

Natco Pharma's share price on the BSE surged 8% to open at ₹1108.95, significantly higher than the previous close of ₹1029.20. On the NSE, Natco Pharma's share price briefly reached ₹1100, approaching its 52-week high. 

The share price has experienced significant growth, rising 32.27% since the beginning of the year and 73.55% over the past 12 months. Trading activity on the NSE is currently very high, with volume reaching 3.92 times its 30-day average. The RSI of 71.44 indicates that the stock may be overbought, suggesting a potential for a price correction. With today’s gains Natco Pharma’s share price is up almost 70 in the year giving impressive returns to its investors.

Natco Pharma's net profit soared by 40% year-on-year in the January-March 2024 quarter, reaching ₹386.3 crore compared to ₹276 crore in the same period last year. This represents a significant 81% increase from the ₹212.7 crore reported in the December 2023 quarter.

During the same quarter in the preceding fiscal year, Natco Pharma recorded a net profit of ₹275.8 crore, as per a regulatory filing. The company's operational revenue experienced a 19% growth, rising from ₹898 crore in the previous year to ₹1,068.3 crore. 

During the fourth quarter of this fiscal year, EBITDA surged by 46.6% to ₹497.3 crore, marking a significant increase from ₹339.2 crore recorded in Q4 of FY23. The EBITDA margin for the reporting quarter reached 46.6%, exhibiting a notable improvement compared to the 37.8% margin observed in the corresponding quarter of the previous fiscal year. EBITDA, an acronym for earnings before interest, tax, depreciation, and amortization, serves as a measure of a company's operating profitability. 

The company's consolidated total revenue surged by 46.8% year-on-year, reaching ₹4,126.9 crore for the fiscal year ending March 31, 2024, up from ₹2,811.7 crore in the previous year. Similarly, consolidated net profit experienced a significant jump of 94.1%, rising to ₹1,388.3 crore from ₹715.3 crore in the prior year.

The company's domestic business operations encountered a one-time expense of ₹90 crore, which is reflected in both revenue and profitability figures. The crop health sciences (CHS) division faced a challenging crop season, leading to stock returns that were ₹25 crore lower than anticipated. Furthermore, the CHS division recorded provisions on its assets totaling ₹30 crore.

Bloomberg data reveals that 14 analysts are tracking the company, with nine recommending a 'Buy', three recommending 'Hold', and two suggesting 'Sell'. The average 12-month price target from these analysts indicates a potential downside of 6.5%. 

Natco Pharma Ltd. is engaged in manufacturing active pharmaceutical ingredients. The Company's segments include bulk chemicals, finished dosage formulations, retail pharmacy and job work charges.

The Company's products in the oncology segment include Desifer, Veenat, Bendit, Bortenat, Lenalid and Clokeran. The Company's product offerings in the pharma segment include T-Score, PT-MaX, Glatimer, Tarana and Tigi.

The Company operates in India, United States of America, Europe and the rest of the world.

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