Event
Over the last few days, Natco has made a couple of announcements which are interesting from a strategic perspective even though the near term financial impact may be limited
Key highlights
Valuations & view
Given their unconventional nature, we believe that the outcome / degree of success of Natco’s these two initiatives is hard to predict. However, given the increasing competitiveness of the typical generics business model, we believe that such “out of box” strategic thinking – strategic innovation will be increasingly key to success for Indian pharma players. In our view, Natco’s business strategy is broadly in-line with this thought process which differentiates it from most Indian peers. Overall, with proven R&D capabilities post successful launches of multiple complex generics and a much stronger balance sheet, Natco has now created a strong platform to make relatively aggressive investments (versus the past) to move into the next growth orbit. While earnings may be flattish over FY19-21E, anticipated launches of gRevlimid and gNexavar etc., accompanied with the scale-up in India and RoW markets will keep up the earnings momentum over the next 3-5 years. Maintain Outperformer.
Natco Pharma Limited is a pharmaceutical company. The Company is engaged in developing, manufacturing and marketing finished dosage formulations (FDF) and active pharmaceutical ingredients (APIs). The Company's segments include active pharmaceuticals ingredient, finished dosage formulations, job works, pharmacy and others. The Company's product categories include Domestic Formulations, International Formulations, API's and Blockbusters. The Company's products include Alphalan, Bandrone, Bendit, Clokeran, Lenalid, Thioplan, Anastronat, Capnat, Fulvenat, Kabanat, Natdox-LP, Rapact, Temonat, X-Trant, Glatimer, Hepcinat, Natdac, Natzold, Tigi, Alprazolam, Chloroquine Phosphate, Lansoprazole, Letrozole, Granisetron, Rizatriptan IR, Imatinib, Salmeterol Xinafoate, Sertraline Form I, Ibandronate Sodium Monohydrate, Pantoprazole Sodium Sesquihydrate, Ondansetron Hydrochloride (Injectable Grade), Daclatasvir and Glatiramer Acetate. The Company manufactures over 20 products under contract.
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