Natco Q1 FY27: consolidated PAT falls 57% YoY to ₹206.5 Cr on Lenalidomide exit

Natco Pharma's consolidated Q1 FY27 (quarter ended 30 June 2026) revenue fell 44.7% YoY to ₹735.2 Cr (₹1,328.9 Cr in Q1 FY26) and consolidated PAT fell 57.0% YoY to ₹206.5 Cr (₹480.3 Cr), as the company lost the high-margin exclusivity window on generic Lenalidomide (Revlimid) that powered last year's base. Sequentially revenue was roughly flat (-0.5% QoQ vs ₹739.1 Cr) but PAT fell 23.2% QoQ from ₹269.0 Cr — though that Q4 base was itself inflated by a one-off ₹115 Cr deferred-tax credit (Section 115BAA re-measurement) booked in the March 2026 quarter, so the underlying QoQ profit trend is less negative than the headline suggests. Adjusting for the ₹84.3 Cr share of profit now consolidated from associate Adcock Ingram Holdings (South Africa) — which contributed nothing a year ago — core consolidated PAT fell closer to 74.6% YoY to ₹122.2 Cr, a materially steeper decline than the 57.0% reported number.

The compression sits squarely in the topline mix: operating margin (EBITDA/revenue) fell to 25.4% from 43.0% a year ago, and net margin to 26.0% from 34.5%, as the International Formulations segment — home to the US Lenalidomide franchise — dropped to ₹477.1 Cr from ₹1,120.9 Cr YoY per the company's segmental disclosure. This was partially offset by the base business: API revenue rose to ₹66.7 Cr from ₹52.6 Cr (+27%) and Domestic Formulations to ₹136.4 Cr from ₹107.0 Cr (+27%) YoY, matching management's framing that base-business growth partially cushioned the Lenalidomide decline. Standalone (parent-only) numbers show the divergence starkly — standalone PAT fell 83.9% YoY to ₹74.6 Cr (₹464.1 Cr) versus the consolidated 57.0% decline, with the gap explained by the newly consolidated Adcock associate income and other overseas subsidiary contributions absent from the standalone book.

The stock went into the print at ₹890.15, down 7.9% over the past month of trading.

This decline was pre-signalled: on the Q4 FY26 call, management guided FY27 revenue of ₹3,400-3,500 Cr and PAT of ₹700-750 Cr, explicitly flagging a dip from the Lenalidomide falloff and framing FY27 as a base year ahead of a targeted 15-25% earnings CAGR from FY28. Annualising Q1 (₹735.2 Cr revenue, ₹206.5 Cr PAT) implies roughly a ₹2,941 Cr revenue run-rate — trailing the low end of guidance — while the PAT run-rate of about ₹826 Cr tracks ahead of the guided range, aided by the Adcock associate income; on balance the quarter reads as broadly consistent with the outlook management already set, not a material beat or miss. No independent brokerage consensus figure specific to the Q1 FY27 print was found in public searches; media reports note the stock had already corrected sharply in the days before results as the market pre-priced the exclusivity loss, so the street comparison is unknown rather than a clean beat or miss. On corporate actions, the board — at the same meeting — declared a ₹1.50/share interim dividend and approved evaluating a ₹2,000 Cr fundraise (equity/QIP/rights or combination), alongside board committee reconstitutions; NATCO also raised its Adcock Ingram stake to 49% in July 2026 (from 35.75%), the source of the associate income noted above.