Natco Pharma Limited Q2 profit falls 61% to Rs 203 crore

Natco Pharma Limited reported Q2 FY27 consolidated profit after share of associate of Rs 202.6 crore, down 61% year-on-year from Rs 517.9 crore, as lower Lenalidomide revenue outweighed growth in its base business and subsidiaries. The board also declared a second interim dividend of Rs 1.25 per share.

Why did Natco Pharma's Q2 FY27 profit decline?

Natco Pharma's Q2 FY27 profit declined because the company reported lower Lenalidomide revenue, which outweighed growth from its base business, including subsidiaries. Consolidated profit after share of associate stood at Rs 202.6 crore for the July-September 2026 quarter, compared with Rs 517.9 crore in the corresponding quarter of FY26.

Revenue from operations was reported at Rs 967.3 crore, down 29% from Rs 1,363 crore a year earlier. The company's consolidated revenue, which includes subsidiaries, was Rs 1,019.4 crore, a 30% decline from Rs 1,463 crore in Q2 FY26. The two reported measures reflect the source's separate presentation of revenue from operations and consolidated revenue.

The operating impact was sharper than the revenue decline. EBITDA before share of associate fell 54.4% to Rs 310 crore from Rs 679.2 crore, and the EBITDA margin declined to 30.4% from 46.4%. Separately reported operating figures showed EBITDA of Rs 258.3 crore and a margin of 26.7%, compared with Rs 579 crore and 42.5%, respectively, in the prior-year quarter.

How did Natco Pharma perform compared with Q1 FY27?

Natco Pharma's consolidated revenue improved sequentially to Rs 1,019.4 crore in Q2 FY27 from Rs 794.4 crore in Q1 FY27, although it remained below the year-ago level. The company said the quarter-on-quarter recovery was supported by stronger international formulations.

Profitability did not show the same sequential improvement on the disclosed per-share measure. Earnings per share were Rs 11.31 in Q2 FY27, marginally below Rs 11.53 in Q1 FY27 and substantially lower than Rs 28.94 in Q2 FY26. This indicates that revenue recovery from the June quarter did not offset the year-on-year pressure associated with lower Lenalidomide revenue.

Other income also declined year-on-year, to Rs 52 crore from Rs 100 crore. The fall in other income occurred alongside the contraction in operating earnings and contributed to the weaker reported earnings comparison.

What dividend has Natco Pharma declared for FY27?

Natco Pharma has declared a second interim dividend of Rs 1.25 per equity share of face value Rs 2 for FY27. The dividend represents 62.5% of the face value per share.

The company has fixed November 19, 2026, as the record date for determining eligible shareholders. The payment process is scheduled to begin from November 27, 2026. The dividend declaration followed the board's consideration of the unaudited results for the quarter and six months ended September 30, 2026.

For shareholders, the interim dividend provides a defined cash distribution despite the substantial year-on-year decline in quarterly earnings. The disclosed information does not provide a total dividend outgo or a revised dividend policy, so the financial significance of the payout beyond the per-share amount cannot be calculated from the available data.

What will investors look for in the Natco Pharma earnings call?

Investors will look for management's comments on Lenalidomide revenue, international formulations, domestic pharmaceutical sales and operating profitability when Natco Pharma holds its Q2 FY27 earnings call at 4:00 p.m. IST on November 13, 2026. The call follows the board meeting that considered the unaudited quarterly and half-yearly results.

The main reported contrast in the quarter is between sequential revenue growth and significant year-on-year declines in revenue, profit and margins. Management's discussion may provide further detail on the drivers of this comparison and the performance of the base business and subsidiaries, including Adcock Ingram, in which ownership increased to 49%.

No share-price movement or market reaction was provided in the source material. For investors, the directly measurable impact is therefore the weaker financial performance: consolidated revenue fell by 30%, profit after share of associate fell by 61%, and the EBITDA margin decreased by 1,600 basis points year-on-year.

Conclusion

Natco Pharma's September-quarter results show a marked year-on-year reduction in earnings, led by lower Lenalidomide revenue. Consolidated revenue of Rs 1,019.4 crore was higher than the preceding quarter but remained 30% below Q2 FY26, while profit after share of associate fell to Rs 202.6 crore and operating margins contracted.

The next disclosed event is the November 13, 2026 earnings call at 4:00 p.m. IST. Investors will watch for management's explanation of international formulations performance, domestic sales, margin pressure and the effect of lower Lenalidomide revenue, alongside the November 19 dividend record date and the planned payment process from November 27.