NATCO Pharma:
Concall Summary dated 13th Nov 2020
Revenue: ₹802.2 cr (▲65.2%) Net Profit: ₹203.9 cr (▲73.2%)
Financial Performance:
- The revenue from operations was ₹802.2 crore in Q2 FY21 as against ₹485.7 in Q2 FY20, an increase of 65.2% YoY.
- During the quarter, the net profit grew by 73.2% YoY to ₹203.9 crore from ₹117.7 crore in Q2 FY20.
- It had a cash and cash equivalent of ₹206.2 crore as on September 30, 2020.
- The net debt was ₹431 crore in Q2 FY21 with actual borrowings of ₹105 crore and foreign bill discounting of ₹326 crore.
- It declared a dividend of ₹3 per share during the quarter.
Business Performance
- The active pharmaceutical ingredient (API) had a revenue of ₹199.7 crore during the quarter.
- The domestic formulations business revenue was ₹108.3 crore in Q2 FY21 while the formulations, export business stood at ₹482 crore during the quarter.
- It witnessed a decline in the sale of Hepatitis C drug and ~70%-75% of the sales potential had been realised on account of lower visit to hospitals for cancer treatments due to Covid.
- The cardio and diabetology business performed well, with a demand pick-up of 70% towards oral business. The chemotherapy business remained subdued as the maximum revenue is derived from 5 major states Delhi, Mumbai, Hyderabad, Chennai and Bangalore, which witnessed a decline in patient’s visit.
- The decline in oncology business was more in USA than in India. It witnessed a less decline in India on account of branded nature of the business here.
- The total capex spending towards agriculture-chemical (agro-chem) business was ₹31 crore during the quarter and overall capital expenditure towards it had been ₹140 crore. The company would be hiring 80-100 people for launching its new product portfolio. It is utilising its capital expenditure mostly towards manufacturing facilities.
- The company had settled the litigation process towards its launch of Revlimid during March, 2022.
- Its marketing partner Breckenridge Pharmaceutical Inc. had received approval for the abbreviated new drug application (ANDA) for Pomalidomide capsules from the USFDA, and both the companies had settled litigation for the filing approval.
- The marketing partner which sells Pomalyst in the USA market for specific cancer treatment had a sale of ~$1 billion during the year.
- The retail business had performed better in Brazil and Canada as compared to USA.
- The other expenses were ₹207.2 crore which increased during the quarter on account of Remdesivir launch in USA and the company incurred this as a one-time expense and expects it to normalise during the upcoming quarters.
Disc: Invested in Core PF.