NATCO Pharma Ltd. issues fresh guidance

The FY26 material does not provide a quantified gRevlimid-versus-base-business split. It reports aggregate international formulations, not the US generics business or the gRevlimid portfolio separately; therefore, 73.9% international formulations should not be read as gRevlimid’s contribution, nor should the residual 26.1% be treated as the base business.

FY26 reported mix and closest proxy

Historical alignment: FY25 international formulations were Rs 3,759.7 Crores against consolidated total revenue of Rs 4,784.0 Crores, implying 78.59%, derived from the presentation’s FY25 figures ^[1]. On the same presentation basis, the FY26 international share was 73.9%, implying a roughly 4.7 percentage-point reduction in international concentration. This is directionally consistent with the loss of exclusivity and lower contribution from gRevlimid, which materially affected FY26 performance ^[2].

However, the historical evidence does not establish that gRevlimid itself represented 78.6% of FY25 revenue: that figure is for all international formulations, including profit share and subsidiaries. FY24 is also not directly comparable from the cited extracts; only domestic-formulation sales of Rs 386.7 Crores are shown for FY24, without a matching total or international-formulation denominator ^[3].

Conclusion: the defensible read is that Natco remained heavily internationally concentrated, but the FY26 mix shows some reduction in that concentration after gRevlimid pressure. A precise FY26 split between gRevlimid and the base business, and a like-for-like FY24/FY25 US-versus-base comparison, is not separately reported in the cited material.

FY26 R&D intensity is projected at 10.5% of sales, 2.2 percentage points above the FY23–FY25 average of 8.3%. The increase is approximately 26.5% relative to the historical average.

Notes: † Derived as (8.3% + 7.5% + 9.1%) / 3 = 8.3%.

Margin implication: all else equal, the higher R&D allocation implies roughly 2.2 pp of EBITDA-margin headwind versus a cost structure operating at the recent three-year average. This is a mechanical sensitivity, not a formal management bridge: revenue growth, product mix, gross-margin expansion and other cost efficiencies could offset part or all of the pressure.

The FY26 presentation reports an EBITDA margin of 39.6% ^[5], but the cited material does not provide a separate forward EBITDA-margin guidance number. Therefore, the defensible conclusion is that the FY26 strategy embeds a structurally higher R&D burden and would, absent operating offsets, lower the margin guidance by about 2.2 pp versus an otherwise comparable historical-cost baseline.

FY26 guidance was missed, despite very strong reported growth. Management had indicated Agrochemicals revenue of Rs 150-160 Crores in FY26 ^[6], implying roughly 151%-168% growth over FY25 revenue of Rs 59.8 Crores. Actual FY26 Crop Health Sciences revenue was Rs 138.2 Crores, versus Rs 59.8 Crores in FY25—an increase of 131.1%, calculated from the reported segment figures ^[1].

The two-year FY24-FY26 revenue CAGR cannot be calculated reliably from the cited segment disclosures, because FY24 Crop Health Sciences revenue is not reported in the relevant revenue table. The measurable comparison is therefore FY25-FY26 growth: 131.1% actual growth versus 151%-168% implied by guidance.

Capacity utilization: the cited FY26 presentation and guidance disclosure do not specify the utilization levels assumed—for example, whether the targets required 50%, 70% or 80% utilization. The materials identify scaling the agri business and adding products and sales capacity as growth priorities ^[7], but do not quantify plant utilization. Accordingly, the shortfall cannot be attributed specifically to utilization without a separate management disclosure.