Please refer to important disclosures at the end of this report
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
CMP `1003
Reuters Code
BSE Sensex
Face Value (`)
Market Cap (` cr)
52 Week High / Low
Avg. Daily Volume
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Natco Pharma Ltd
Others | Pharmaceuticals
July 27, 2017
Natco Pharma | Pharmaceuticals
June 5, 2017
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
Angel Broking Private Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited,
Bombay Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL
and Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Private Limited is a
registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number
INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing
/dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or co-managed public
offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the
companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine
the merits and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Pvt. Limited endeavors to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from
or in connection with the use of this information.
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)