ICICI Direct's research report on Natco Pharma
Q4FY20 revenues remained flat at Rs 455 crore. Export formulations de-grew 13.3% YoY to Rs 219 crore due to supply chain issues amid Covid-19. Domestic formulations de-grew 44.8% YoY to Rs 103 crore due to decline in Hepatitis-C and oncology segment on account of pricing pressure. API segment grew 38% YoY to Rs 96.4 crore. EBITDA margins declined 433 bps YoY to 28.2% mainly due to change in product mix and lower realisation in the domestic oncology portfolio. EBITDA de-grew 13.5% YoY to Rs 128.3 crore. Net profit de-grew 22.1% YoY to Rs 94.1 crore.
Outlook
The growth trajectory is likely to improve from FY22 onwards as the new strategy settles down. We ascribe a target price of Rs 740, which includes base business value of ~Rs 448 (20x FY22E EPS of Rs 22.4) + Rs 292 for NPV of FTF/Para IVs in the US.
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