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INVESTMENT INSIGHTS

Check Before You Invest : Natco Pharma Ltd

BSE: 524816 NSE: NATCOPHARM ISIN: INE987B01026
  |   Sector:  Healthcare   |   Industry:  Pharmaceuticals & Drugs

Snapshot

Q.1 Which industry/sub-sector does Natco Pharma Ltd belong to?
Natco Pharma Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.
Q.2 Is Natco Pharma Ltd a good quality company?
Natco Pharma Ltd is a good quality company, based on a consistently good 10 year financial track record.
Q.3 Is Natco Pharma Ltd undervalued or overvalued?
Natco Pharma Ltd appears Somewhat Undervalued, as its key valuation ratios are below with their past averages.
Q.4 Is Natco Pharma Ltd a good buy now?
Natco Pharma Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Natco Pharma Ltd?
Natco Pharma Ltd revenue growth is 10.8% for FY-2025 , which is below its 5 year CAGR of 18.3% , indicating slower growth.
Q.2 Gross Profit margin of Natco Pharma Ltd?
Natco Pharma Ltd Gross profit margin which is the profit after deduction of direct costs, is 53% for FY-2025 , which is above its 5 year median of 35.6% , indicating increasing margins.
Q.3 Operating Profit Margin of Natco Pharma Ltd?
Natco Pharma Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 49.53% for FY-2025 , which is above its 5 year median of 33.87% indicating increasing margins.
Q.4 Net Profit Margin of Natco Pharma Ltd?
Natco Pharma Ltd Net Profit Margin is 42.52% for FY-2025 , is above with its 5 year median of 26.42%, indicating increasing margins.
Current Level Historic Median
Gross Profit Margin 53 35.6
Operating Profit Margin 49.53 33.87
Net Profit Margin 42.52 26.42
Q.5 Return on Asset of Natco Pharma Ltd?
Natco Pharma Ltd Return on Asset is 24.35%, which is above its 5 year historical median of 13.29%, indicating improved asset utilization efficiency.
Q.6 Return on Equity (ROE) of Natco Pharma Ltd?
Natco Pharma Ltd Return on equity is 27.98% for FY-2025 , which is above its historical median of 15.66%, indicating the business is making better use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Natco Pharma Ltd?
Natco Pharma Ltd Return on capital employed is 32.85% for FY-2025 , which is above its estimated weighted average cost of capital(WACC) 13.5%, indicating value creation.
Q.8 Cash conversion cycle of Natco Pharma Ltd?
Natco Pharma Ltd Cash conversion cycle is 105 days, below its historical median of 145 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 0.62 0.54
ROE 27.98 15.66
ROCE 32.85 18.06
Cash Conversion Cycle 105 days 145 days
Q.9 Debt to Equity ratio of Natco Pharma Ltd?
Natco Pharma Ltd Debt-to-Equity ratio is 0.04 , which is lower with the industry average of 0.15 , indicating lower debt levels in the industry.
Q.10 Debt to cash flow from operations of Natco Pharma Ltd?
Natco Pharma Ltd Debt to cash flow from operations is 0.16 , which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Natco Pharma Ltd?
Promoters hold 49.42% of the Natco Pharma Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Natco Pharma Ltd vs industry peers?
Natco Pharma Ltd revenue CAGR is 18.26% , compared to the industry median CAGR of 5.54% , indicating faster growth and gaining its market share.
Profit Metrics
Current Level Industry Median
Revenue 4,429.5 137.1
Gross Profit 2,347.9 15.1
Operating Profit 2,194 16
Net Profit 1,883 5.6
Operating Efficiency
Current Level Industry Median
Asset Turnover 0.62 0.8
ROE 27.98 8.91
ROCE 32.85 11.59
Cash Conversion Cycle (days) 105.13 76

Valuation & price assessment

Q.1 Stock return of Natco Pharma Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 9.6% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 9.6% 4% 25.2% 35.3%
Q.3 Valuation ratios of Natco Pharma Ltd vs historical?
The current P/E is lower that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 12.51 33.58 40.28
Price to Book 2.22 3.82 2.77
Price to Sales 4.27 7.44 2.65
EV to EBITDA 7.95 22.53 15.67

Check more companies

1. Ajanta Pharma
2. JB Chem & Pharma
3. Emcure Pharma
4. Gland Pharma
5. Wockhardt
6. Pfizer
7. Astrazeneca Pharma I
8. Sai Life Sciences
9. Natco Pharma
10. Eris Lifesciences
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