ValuePickr Forum

Natco Pharma: Focusing On Complex Products

(Krishnendu) #233
2 Likes
(manivannan.g) #235

Natco to disinvest Rs.100Crores to setup Agrochemical Technical and Formulation products plant in Nellore, AP.

1 Like
(Susindar) #236

Why would a pharma company want to divest in commodified agrochemical business? This stock was in my radar but I will think twice now.

(manivannan.g) #237

If you take Hikal for an example, they does pharma and agrochem. We have to wait for the concall or further update on what sort of agrochemical they are venturing into, before taking any decisions.

(stockcollector) #238

Diworsiefication?

Discl - 15% of my portfolio
No offence intended and not an offensive word (not sure why flagged as offensive by someone)

1 Like
(Susindar) #239

Did Hikal start as agrochemical and then go in to pharma as it matters a lot. You would expect to get into a commodity business and then graduate to a higher level. But not the other way around. If you do not have any better alternative to use the shareholder funds, it’s better to return as dividend or buyback rather than enter in a business which I am sure will reduce the overall ROE. In my mind a definite diworsification.

3 Likes
#240
2 Likes
(stockcollector) #241

(stockcollector) #242

Excellent stuff from Natco. Ibrutinib is a wonder drug, used in treating certain blood cancers. Not a chemo drug… I am impressed. Patent expiry in 2026, so will have to wait a long time though!

7 Likes
(Sujay Ghosh) #244

Q3 FY2019 Result
https://www.bseindia.com/xml-data/corpfiling/AttachLive/767a4ceb-31b5-4c9b-bf11-60e8b1d23883.pdf

2 Likes
(Bhaskar Jain) #245
1 Like
(PS) #246

Guys… Any idea if Lupin-Natco combo can price it lower than other players in the market. This drug has always had a view of being costlier by all firms. Also a decent market size to capture if priced competitively

1 Like
(AKGupta) #247

Just started following the company. Has it cancelled the buyback it announced in Nov? Can somebody point me to the background to this Event if it’s true and what was the reason? Seems like a decent company available at a reasonable price. What’s spooking it?

(PS) #248

Buyback is open market buyback and not tender offer.
And I think its period is already on…till May 2019

1 Like
(Mohammed Rehan) #249

Doesn’t the immediate 1 to 2 year period look little bleak with no significant launches?

(djmoney) #250

As per their ad buyback will end on 25th March, mean just couple of days.
So expecting positive news or it will drag below rs.500
Any thoughts ?

(skg) #251

Hi, I was looking at pharma companies and came across NATCO pharma. This company seems good in financial like good ROE/ROCE and low D/E. Does anyone know which it has PE of 12 when other pharma companies have PE around 20?

1 Like
(sahilverman) #252

Has 250 crores of cash and marketable investments on the balance sheet as well. Wondering why it has fallen so much. Value buy or value trap?

(arpitjain512) #253

Some points captured in one of the research report I read which may be the cause of stock hitting new 52wk lows :

Margin pressure affected the numbers…
Higher competition in the flu segment (Oseltamivir) resulted in lower export formulation revenue which witnessed a degrowth of 11%(YoY basis) while do-mestic formulation sales was also flat or slightly negative. However, API (both domestic and international) grew by 22% YoY reflecting better sales momen-tum. Their latest US filing includes ANDA for generic version of Ibrutinib tablets which had sales of approximately US$ 2.6 billion for twelve months ending Sep-tember, 2018 (according to data from IQVIA). Focus will be on 10-14 key niche molecules in the US over a period of time.

EBITDA margin to stabilize…
EBITDA margin stands at 40% in Q3FY19 which is in premium to many other top players in the sector. However it is down by 1200bps on a YoY basis. This is primarily on account of lower margin from Oseltamivir sales in the US. However we expect this loss of revenue will be replaced by copaxone sales in the US which looks promising. The CAPEX for FY19 will be around Rs400crs which will be maintained in the coming years. The management has guided for higher revenue post CY20 as new niche molecules get approved (Revlimid). We therefore revise downward our Revenue/PAT estimates by 4%/3% for FY20 to factor lower sales from the US.

Higher focus on Emerging Markets (EM)…
The management has guided that there will be greater focus on the emerging markets like Canada, India and Brazil for the medium term. They have also start-ed working on green-field manufacturing facilities for producing niche agrichemicals which is expected to be completed by the end of 2019 (total CAPEX of Rs100crs). In India they have launched drug Valsartan-Sacubitril un-der its brand VALSAC which is used for certain types of heart failure. Another option they are exploring is China market where they have put a target of 10-11 filings. We are also expecting a good Q4 from Brazil while it will be muted for Canada (expecting good numbers in FY20)

3 Likes
(arpitjain512) #254

Natco Conference Call Highlights

2 Likes