Buy Natco Pharma, target price Rs 1021: ICICI Securities

ICICI Securities has buy call on Natco Pharma with a target price of Rs 1021. The current market price of Natco Pharma Ltd. is Rs 850.55. Time period given by analyst is one year when Natco Pharma Ltd. price can reach defined target.

Natco Pharma Ltd., incorporated in the year 1981, is a Mid Cap company (having a market cap of Rs 15529.31 Crore) operating in Pharmaceuticals sector.

Natco Pharma Ltd. key Products/Revenue Segments include Pharmaceuticals, Export Incentives, Sale of services, Job Work, Scrap and Other Operating Revenue for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 590.70 Crore, up 42.27 % from last quarter Total Income of Rs 415.20 Crore and up 53.03 % from last year same quarter Total Income of Rs 386.00 Crore. Company reported net profit after tax of Rs 80.40 Crore in latest quarter.


Investment Rationale
Natco Pharma’s (Natco) Partner Teva has launched Revlimid (lenalidomide capsules), in 5mg, 10mg, 15mg, and 25mg strengths, in the US. Teva has sole exclusivity for all these strengths. As per BMS (Celgene) quarterly filings, Revlimid annual US total sales were USD8.6bn (USD2.3bn BTC revenues as per IQVIA). Revlimid is used in adults for the treatment of multiple myeloma, certain myelodysplastic syndromes, and mantle cell lymphoma. >15 companies had filed for Revlimid, but Dr Reddy’s and Natco are the only ones to receive product approval. Post recent correction, the brokerage upgrades Natco to BUY from Add.

Promoter/FII Holdings
Promoters held 48.87 per cent stake in the company as of 30-Sep-2021, while FIIs owned 20.48 per cent, DIIs 9.82 per cent.