Natco Pharma Ltd Research Report - 09th Mar 2017

Pharmaceutical | Published on Mar 09th 2017


Natco Pharma is a Hyderabad based pharma company with focus on limited competition and high margin products. It has presence in domestic and global markets and has two main business segments i.e. API and Formulations. Natco’s topline and bottomline is set to grow at 36% and 61% CAGR over FY16-FY19E due to 1) strong performance of domestic formulations and 2) monetization of high value ANDAs. The stock at the CMP of Rs769 is trading at P/E of 21.2x of FY2019E EPS of Rs37. This is 15% discount to its 3 year average P/E multiple of 26x. We initiate coverage on Natco Pharma with buy rating and SOTP value of Rs926 (Rs890 base on 24xFY19E EPS + Revlimid NPV at Rs37. ) implying 18% upside from current level.

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CMP 786
Target Price 926
Investment Period12 Months

Stock Info

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Shareholding Pattern (%)

Public & Others21.0
Grand Total100.0

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