Natco Pharma Ltd. shares slipped 0.91% to ₹801.45 on Friday after the drugmaker reported a brutal 60.9% contraction in second-quarter net profit, hammered by a broad-based slowdown across core formulations. Intraday selling dragged the stock down as much as 3% as trading desks digested sharp margin erosion across the operational print.
Net earnings plummeted to ₹202.6 crore for the quarter ended September 30, down from ₹518.4 crore in the corresponding period last fiscal year, according to regulatory disclosures submitted to the exchanges. Revenue from operations shrank 29% year-on-year to ₹967.3 crore, compared to ₹1,363 crore a year earlier.
The erosion was severe.
Earnings before interest, tax, depreciation, and amortisation (EBITDA) dropped 55.4% to ₹258 crore, down from ₹579 crore posted in the year-ago period. Operating margins took an immediate beating, contracting 1,590 basis points to land at 26.6% compared with 42.5% twelve months prior. The collapse reflects sharp operational deleverage as top-line receipts shrank without a corresponding decrease in overheads.
| Metric | Q2 FY27 | Q2 FY26 | YoY Change (%) |
|---|---|---|---|
| Revenue from Operations | ₹967.3 crore | ₹1,363.0 crore | -29.0% |
| EBITDA | ₹258.0 crore | ₹579.0 crore | -55.4% |
| EBITDA Margin | 26.6% | 42.5% | -1,590 bps |
| Net Profit | ₹202.6 crore | ₹518.4 crore | -60.9% |
Market Context: The second-quarter drop extends a persistent trend of earnings compression for the Hyderabad-based pharmaceutical manufacturer. The company previously logged a 57% decline in first-quarter profit, while consolidated net sales for the quarter ended March 2026 dropped 39.47% year-on-year to ₹739.10 crore.
To cushion the earnings miss, the company's Board of Directors approved a second interim dividend of ₹1.25 per equity share for FY27. That represents a 62.5% payout on the face value of ₹2 per share, following a ₹1.50 interim dividend announced in the previous operating quarter.
The board established November 19, 2026, as the formal record date to determine shareholder dividend eligibility. Disbursement will begin on November 27, 2026.
The stock has shed roughly 10% of its market value since the start of 2026, trailing the broader healthcare index as institutional desks recalibrate baseline cash-flow projections.