Following article elaborate on how generic drugs are very important to US.
90% of prescriptions were for generic drugs.
2.FDA is increasing speed of ANDA reviews. 3.US is looking for supply continuity over pricing, that result in increase in price.
Supply side constrains.
When I ask Copilot about companies I hold, following summary come out. Interesting.
. Natco Pharma:
Strategic Presence in the US: Natco Pharma has actively engaged in the US market since 2007. By forging co-development and licensing partnerships with leading US generic pharmaceutical companies, Natco has successfully developed and launched several first-to-market generics and complex formulations.
API & Intermediates: Supriya Lifesciences is engaged in the manufacturing of active pharmaceutical ingredients (APIs) and intermediates. It produces 38 APIs across diverse therapeutic segments.
APIs and Intermediates: Aarti Pharmalabs is a generic pharmaceutical company focused on developing and commercializing APIs and FDFs (finished dosage formulations). It has a strong presence in the Xanthine derivatives segment.
Global Compliance: The companyās facilities are compliant with worldwide standards (EMA, US FDA, WHO, PMDA, TGA, KFDA, ANVISA).
In summary, all three companies have made significant strides in the US generics market, leveraging their expertise, partnerships, and global reach. Keep an eye on their performance as they continue to navigate this dynamic industry!
Hi folks, new to investing and recently started to analyze pharma sector and this company, what I have learned is: this company has built a strong position in the value chain. It is expanding geographically into new market areas outside India. The Revlimid patent is expiring in the coming months (i guess its 20 months or so) but they have some ideas that they are working on. Kothur plant has recieved a warning letter but they say the risk can be mitigated through other plants.
Looks like this company is still undervalued compared to peers as of today. Company has guided 20%+ profit growth YoY for FY25
Rajeev Nannapaneni: This year, we did about Rs. 1,388 crores profit. I think going forward next year, we at least see if all goes well and there are not too many surprises, we should do greater than 20% growth for the year.
Why this company is still given low P/E compared to peers? What am i missing? Or are there any other metrics to look at beside P/E?
Thank you Dr.Vikas, it was very insightful, I would recommend others to listen to it as well. It gave me a different perspective of looking at the company.
Natco Pharma is a kind of company that I like to stay invested inā¦ I sleep easy when my capital is invested in it. Granted that it went through a 7 year period of no returns but that happens in every stock/companys evolution. Many have burnt hands investing in it during its stagnation, myelf included, where it was taking its time evolving into a serious disruptor in the complex generics spaceā¦
Their recent investment in domestic CAR T cell therapy company is a testament to the razor sharp focus of the promoter management of the company to be in the cutting edge of cancer treatmentā¦ the only critiism it merits is maybe the equity percentage they went for was a tad lessā¦but they did say they have an option of increasing their investment so lets see how it goesā¦ their unflinching resolve to plough back 8 to 10 percent of their standalone revenues into Research & Development makes their commitment to being serial disruptors a serious oneā¦
The promoters appear to be mindful of what the overwhelming majority of investment pundits point out is the inability of projecting it future growth and thereby not being able to proscribe a partiular PE valuation to the company hence they have listed out a bevy of sustainable growth drivers of the coming future:
growing their fledgling domestic agro chemical division
launching more products in their foreign subisdiaries and creating new subidiaries in RoW growth markets, thereby getting access to more markets
Increasing Para IV filings inorder toget more and more Para IV approvals, so much so, that routinely every other year they get to launch one or two products
focusing to grow domestic business (this was hit hard due to price capping)
brownfield acquisitionā¦ very tactfully they have given themselves 2 years time to make the acquisition to be in time to set off the falling gRevlimid topline impactā¦
Over and above this I wish they get their act together on their API exports which have been stagnating for the past 3 yearsā¦
The management has guided for a solid 20% growth on the back of a high base and Q1 result in the weeks ahead will dispel worries on that frontā¦ retail public holds some 25% of natco pharma equity and DIIs continue to reduce stakeā¦ this I think is most unfortunateā¦ In the end market is always right, however, it is just the beginning for Natco 2 point O, what do you say?
Just be careful of that analogy. 7 years is long time. Even with high caliber promoters company can under perform. Shilpa med is a prime example. It got itās act right just now
Three points is important and track properly as per my understanding
FoF of the new products, (Check product type Niche segment or normal)
RoW and Geographical expansion
Acquistion of the new business (they are sitting on ~ 2000 Cr cash surplus and donāt want to buyback)
Waiting for Q1 Result and management commentary !!
As mentioned in concall, company is looking for acquisition in RoW as India is expensive. IF it does not materialize for long time, buy back may be considered.
