ICRA Limited has reaffirmed the credit ratings for Natco Pharma Limited, citing a healthy financial profile supported by strong debt metrics and liquidity. The ratings consider Natco’s robust portfolio of complex generics and research capabilities, as well as its market position in domestic oncology. While competition creates pricing pressure, new launches are expected to support revenue growth. ICRA has assigned “[ICRA]AA (Stable)/[ICRA]A1+” ratings for long and short term funding.
Credit Ratings Reaffirmed
ICRA Limited has reaffirmed Natco Pharma Limited’s credit ratings, acknowledging the company’s strong financial health and market position. The ratings are influenced by Natco’s strong portfolio of complex generics, research and development capabilities, and notable presence in the domestic oncology formulations segment.
Rating Details and Instruments
The ratings apply to several of Natco’s financial instruments, including:
- Long-term/short-term Fund-based Working Capital Limits: [ICRA]AA (Stable)/ [ICRA]A1+
- Long Term/Short Term Non-fund Based Working Capital Limits: [ICRA]AA (Stable)/ [ICRA]A1+
- Long Term/ Short Term – Unallocated Limits: [ICRA]AA (Stable)/ [ICRA]A1+
- Long-term – Fund Based – Term Loan: [ICRA]AA (Stable)
- Commercial Paper: [ICRA]A1+
The total amount of instruments rated is ₹2,150.00 crore.
Factors Supporting the Ratings
ICRA’s decision to reaffirm the ratings is based on the following key factors:
- Healthy financial profile with robust debt metrics and strong liquidity.
- Strong portfolio of complex generics and research and development capabilities.
- Notable market position in the domestic oncology formulations segment.
Key Considerations
While the ratings are stable, ICRA notes that Natco faces pricing pressure in the domestic and US markets due to competition. The company is mitigating this through new product launches and expansion into emerging markets. The company’s revenues and margins are expected to moderate going forward as gRevlimid’s patent is expiring in Q2 FY2026, with inventory at high levels.
Financial Performance
Natco witnessed healthy revenues and earnings in FY2025 and H1 FY2026, supported by substantial profit share from gRevlimid and strong performance from its Canadian and Brazilian subsidiaries. The company’s operating profit margin improved to 49.6% in FY2025 from 43.9% in FY2024.
Source: BSE