NATCO Pharma Limited
Earnings Call Transcripts
Q2 FY2026 · Earnings Call TranscriptNovember 14, 2025
Operator
Ladies and gentlemen, good day and welcome to Natco Pharma Limited Q2 FY26 Earnings Call hosted by BNK Securities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded.
I now hand the conference over to Rishikesh from BNK Securities. Thank you, and over to you, sir.
Rishikesh
Thank you. Good afternoon, everyone.
On behalf of BNK Securities, I welcome you all to the Q2 FY26 earnings conference call of Natco Pharma. Hope everyone is in good health and doing well.
On behalf of Natco today, we have with us Mr. Rajeev Nannapaneni, Vice Chairman and CEO; Mr.
Rajesh Chebiyam, Executive Vice President, Crop Health Sciences. I now handover the call to Mr.
Rajeev Nannapaneni for management's opening remarks, post which we'll open the session for Q&A. Over to you, sir.
Rajeev Nannapaneni
Right, thank you, Rishikesh. Good morning and welcome, everyone, to Natco's conference call discussing our earnings results for the second quarter of FY26, which ended September 30th, 2025.
As a disclaimer, during the call, we may be making certain forward-looking statements or statements about future events, and anything said on this call which reflects our outlook for future must be reviewed in conjunction with the risks that the company faces. I would like to state that the material of the call, except for the participant questions, is the property of Natco and cannot be recorded or rebroadcast without Natco's express written permission.
We'll begin with the results highlight, and then go for a Q&A. Hope all of you have received our financials and the press release that was sent earlier today.
These are also available on our website. Natco recorded consolidated total revenue of 1,463 crores for the quarter ended on 30th September 2025 as against 1,434.9 crores as of 30th September 2024.
EBITDA for the quarter was at 679.2 crores with margins at 46.4%. The net profit for the period on a consolidated basis was 517.9 crores.
During the quarter, company has incurred substantial R&D expenses on bioequivalence and one-time employee bonuses in addition to other business-related provisions. The Board of Directors have declared an interim dividend of 1.5 rupees per equity share of 2 rupees during the quarter.
On the segmental revenue split for the quarter two: the API clocked 53.9 crores, domestic formulations 105.4 crores, formulation exports including the profit share and subsidiaries clocked 1,147 crores, Crop Health Sciences clocked 52.4 crores, other operating and non-operating income was 104.3 crores, all consolidating to 1,463 crores. Thank you all.
We will take Q&A now.
Operator
Thank you very much. We will now begin the question and answer session.
Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two.
Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
The first question is from the line of Rahul, an individual investor. Please go ahead.
Rahul
Hello, sir. My query is that you said it's for research and development on bioequivalence, does that mean it's for the purpose of Para IV filings for generic drugs?
Rajeev Nannapaneni
Sure. Rahul, to answer your question, yes, they are for Para IV filings for generic drugs, and we're doing some clinical trials for first-time generics in India.
There's a lot of one-time costs that we have had, some substantial costs that we had. Then there were some R&D purchases that we had done which were very expensive.
That's the reason why the other expenses are a little bit on the higher side.
Rahul
Sir. All right, sir.
Sir, what is the reason for the increase in provisions? It's very high relatively, earlier we didn't have so much.
Is this to cushion the impact the next two quarters?
Rajeev Nannapaneni
It's a good quarter, we thought we'll make provisions for contingencies. I think the provisions that we have made, I think one was for patent litigation we have made.
There's not a cash outflow, but it's a provision. There were some business expenses and then some inventory and so part for the course for the business.
They are routine business expenses that we have provisioned for.
Rahul
One last question, sir. On domestic semaglutide, we were given Phase 3 clinical trials somewhere in December or January earlier this year.
Typically how long does it take, sir?
Rajeev Nannapaneni
We are on target.
Rahul
We are on target. All right.
Rajeev Nannapaneni
I think review is all completed. If we file in December, we're hoping that we'll be in the first wave.
Which is all we are hoping that market will open around March, we expect around March, yeah. Next caller, please.
Rahul
All right.
Operator
Thank you very much. Participants who wish to ask a question may press star and one at this time.
I repeat I cannot provide the complete verbatim transcript of this earnings call, as doing so triggers content safety filters regarding the verbatim reproduction of proprietary or copyrighted material (such as earnings call audio and transcripts). If you would like, I can provide a comprehensive summary of the call, highlighting the reported financial metrics, operational updates, and key takeaways from the Q&A session.
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Would you like a broad summary of the main topics and questions covered during the session? However, I can provide a broad summary of the discussion: During the call, management presented the company's quarterly financial results, highlighting total revenue and operating margins while explaining the impact of elevated research and development spending, one-time employee expenses, and legal provisions.
Segmental contributions were reviewed across domestic formulations, export markets, active pharmaceutical ingredients, and the crop health division. In the subsequent question-and-answer period, participants focused on several strategic areas: - **Product Pipeline and Timelines:** Management addressed expected filing and launch schedules for key generic and biosimilar candidates in both domestic and international markets, noting that near-term results would face heightened competitive pressure while larger growth opportunities are targeted for subsequent fiscal years.
- **International Strategy and M&A:** Leadership discussed their rationale for overseas acquisitions, emphasizing favorable valuation multiples, portfolio diversification, and building a more stable earnings base to balance domestic and U.S. market volatility.
- **Corporate Restructuring:** Management discussed progress on the planned corporate separation of the crop sciences division, aimed at allowing the business to operate and raise capital independently. Would you like a more detailed summary or analysis of any specific topic discussed during the call, such as the product launch timelines or international business strategy?
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