1
Please refer to important disclosures at the end of this report
1
1
Natco Pharma(NPL) is an R&D-driven company with a niche focus in oncology
where it controls almost ~1/4 of the domestic market. In the international
markets it has restricted its forays to complex generic products. During FY17,
overall revenue growth was boosted by Rs 7.05 (Rs.705cr)bn revenue generated
from Tamiflu: formulations, profit sharing and trading income of respectively Rs
2.34bn, Rs 4.12bn and Rs 0.59bn. Domestic oncology reported Rs 3.2bn
revenue and the overall Hep C portfolio clocked Rs 5.4bn revenue. Launches like
gTamiflu, impending ones like gDoxil, gCopaxone, gVidaza, and gTracleer, and
gRevlimid a few years down the line are a testament to its R&D capabilities.
Given its strong US pipeline, foray into the fast-growing cardio-diabetology
division, Hepatitis C underpenetration in India & EMs and leadership in
oncology, Natco is best placed to counter headwinds that several of its peers are
facing.The company sees strong visibility of new product launches over the next
five years, which should be meaningful and help it build over the existing
revenue base. Copaxone approval remains crucial to NPL’s near to midterm
growth prospects. Further management has guided to the domestic business
growing 20% & the Hepatitis-C portfolio growing 20-25% and capex of Rs 3.5bn
for FY18. The company has a RoE 29.4% and going forward expect its niche
product opportunities to take off, this would lead to healthy revenue Hence BUY
BUY
CMP `1003
0.5
Reuters Code
NATP.NS
NTCPH:IN
2
BSE Sensex
32,382
Nifty
10,021
Face Value (`)
Pharmaceuticals
Market Cap (` cr)
17,456
52 Week High / Low
1080/495
Avg. Daily Volume
29,661
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Natco Pharma Ltd
Others | Pharmaceuticals
July 27, 2017
2
Natco Pharma | Pharmaceuticals
June 5, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Natco Pharma
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)