Natco Pharma Limited (NATCOPHARM) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Natco Pharma's Q4FI26 Earnings Conference Call, hosted by 361 Capital Market, Private Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation came through. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on a touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rishikesh Patuli from 361 Capital Market, Private Limited. Thank you and over to you, sir.

Good afternoon, everyone. On behalf of 361, I welcome you all to the Q4 FY26 Earnings Conference Call of Natco Pharma. Hope everyone is in good health and doing well. On behalf of Natco today, we have with us Mr. Raju Nanapanini, Vice Chairman and CEO, Mr. Amit Pare, CFO, Mr. Raju Stadium, Executive Vice President, Cross and Sciences, and Mr. Raju Manath, Investor Relations. And I'll hand out the call to Rajesh for the management's opening remarks, post which will open the session for Q&A. Over to you, sir.

Right.

Thank you, Rishikesh. Good afternoon and welcome, everyone, to NACo's conference call, discussing our earnings results for the fourth quarter of FI26, which ended March 31, 2026. During this call, we may be making certain forward-looking statements, which are not necessarily historical facts. And anything said on this call which reflects our outlook for the future must be reviewed in conjunction with the risks that the company faces. We undertake no obligations to update these forward-looking statements. I would like to state that the material of the call, except for participant questions, is the property of NatCo. It cannot be recorded or rebroadcast without NatCo's express written permission. We'll begin with the results highlight and then follow the work with an interactive Q&A session. NACO recorded consolidated total revenue of 4,375.9 crores for the year ended March 31, 2026, as against 4,784 crores for the last year. The net profit for the period on a consolidated basis was 1,418.5 crores. As against 1,883.4 crores last year. For the fourth quarter, which ended March 31, 2026, the company recorded a net revenue of 816.9 crores on a consolidated basis as against 1,1287.3 crores during fourth quarter of last year. The profit for the fourth quarter on a consolidated basis was 269 crores, including the share of profit of associate, as against 406 crores same period last year. Net profit for the quarter and financial aid includes a one-time benefit of 115 crores as the company has elected to move to the new tax regime from FI 2627. And has re-measured its deferred tax assets on MAC credit and other deferred tax assets slash liabilities. For the quarter, revenue from the associate company Adquart Ingram Holdings Limited, South Africa, was at 1208.2 crores, and profit after tax was at 102.5 crores. NADCO's share of profit based on the current holdings stood at 35.7 crores. Thank you all. Now we'll take the Q&A.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants, you are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question comes in. A reminder to all the participants, you may press star and 1 to ask a question. We have the first question from the line of Candice Pereira from Dalit Capital. Please go ahead.

Yeah, thank you for taking my question. So, my first question is on the sales. So, on a YOY basis, it is much lower. So, I understand it's probably because of regimen. But did we have any impact from the West Asia war as well?

But this, what are you saying? No, okay. First question was, what was the impact? I think, as you rightly pointed out, there's an impact on the M11 industry. The second question was, did we have an impact on Middle East? We were able to supply the product. We had some challenges, but we were able to supply. But there's been an increase in the freight expenses because we had to reroute from our traditional carriers. But we were able to manage.

Okay. And also, our other expenses are much higher as a percentage to sales this quarter. Is there any one-time impact of anything in this?

Yeah. Hi. So, yeah, the other expenses, largely this quarter, we had higher R&D expenses. And also, during the quarter, we had looked into some of the engineering spares and there were some write-downs. So, net net, it is largely because of R&D expense and little bit because of the engineering expense rate.

Okay, can you quantify this?

Yeah, so R&D, so engineering return would be around 20-30 crores. And R&D would be the remaining, large part of the remaining would be the R&D.

Okay, all right. And our F527, F528, our tax rate would be around 22%, right? According to the new tax regime?

So, including the surcharge, it would be around 25%.

Okay. All right. Thank you so much.

Thank you. Sure, sir. We will take the next question from the line of Rahul Chautry, an individual investor. Please go ahead.

Good evening, sir. The presentation doesn't have any guidance for the coming year.

Our expectation is, Rahul, that we should do about 3,400. Two, three, five hundred crores of revenue. Our pat expectation is between 700 to 750 crores pat. I'm making an estimate with some assumption of some increase because of the war. But again, you know, I can't predict everything what's going to happen to the year, but there's been some, we've built in some buffer, but I think that's our expectation that we do. And in addition to that, you know, our South African associate firm. Should do, depending on the exchange rate, about $580 to $600 million in revenue, and the pat expectation of that is about $47 to $48 million, again, subject to how the exchange rate moves and other war-related factors. So the associate profit is assumed in the $700 to $750 goal projection.

Sir, this quarter, did it have any substantial formality divide revenue, or we are going to book it in Q1 mostly, because it's a six-month bump-up only we'll get, you know, the shared thing?

I didn't see a bump, honestly, Rahul. It's fairly competitive. I don't see... We had a little bit of a sale, but nothing substantial that can... Can make a meaningful impact on the earnings. It was a reasonable launch, but I think we launched with multiple generics. Even though namesake is an exclusivity, but I think we had multiple generics in the first wave. I think four or five guys had exclusivity. I don't know the exact number. So, it's been fairly competitive.

So, what would be the cash and books? At the end of the presentation, I must have missed it.

Yeah, so net cash would be around 2,400 crores at a group level.

Right. Thank you so much.

Thank you. Before we take the next question, a reminder to all the participants, you may press star and 1 to ask a question. We have the next question from the line of Thadavarti Sai Surindra and Detail Investor. Please go ahead.

Good evening, management team. This is Sai Surindra. Thank you for giving me the opportunity. I have two questions, sir. Over the last seven quarters, shareholders have been waiting for the meaningful value creation. Can you please explain what are the key triggers that is to improve the investor confidence and the drive growth in the coming year?

So your question is, what are the key products for the year, financial year 26-27? Is that the question? I understand it correctly. I think there are two, three good triggers. I think one is semaglutide we have launched. I think it was first January for the vines. So that is doing reasonably well. We couldn't launch on day one on the pen, but we could launch a while on day one. We're able to cater to a market which is very price sensitive. So even though revenue that you're getting for a while is maybe one-third or one-fourth of what you're getting on the pen, but in terms of market share, I think there's been a good uptake. And A-R-A-R-A-R. Particularly, our Brazilian sub is going to do very well. We had a lot of first-time launches in our oncology portfolio. So, these two will be the major triggers. And, of course, we'll be having consolidated income coming from South Africa, from our shareholding in South Africa. So, I think compared to the past, I think NatCo has a more diversified revenue. And these earnings are, you know, without lending a mind. So, obviously, there's a drop compared to last year. I think the impact on earnings is substantial, but I think in spite of the fact that there's practically no LLMI or it's a very, you know, competitive LLMI, we are able to, you know, generate about 700, our expectation of 750 factors, I think, a reasonable issue.

Okay, next question. Yappai 27 was a challenging year compared to Yappai 27. What did you give the management confidence that Yappai 27 will be better year for shareholder?

I think, see, the way you want to look at this is, I think we have always guided until we have declined. I think our commentary has always been that we will decline. I think you need to understand that the nature of this business is that you're going to have one-offs, and then you're going to do very well at this time. And then when there's going to be a draw, you're going to have a year or two where you're going to see a dip. And again, a larger event happens and things will, it's a cyclical business, I think the nature of the beast. And because we bet on a lot of these jackpots, when the jackpot comes, then earnings look good, or you have an exclusivity looks good. When you don't have the exclusivity, the numbers look good. But I think you have to look at it and take the bigger picture. I think we have a very good pipeline for the future with a lot of exclusivities coming up. We don't have anything in 27, that's true. But I think post-27, you'll see some of these other exclusives will start kicking in. And I think 28 onwards, you'll be able to see a reasonable ride in.

Thank you. Next caller, please.

Thank you. Before we take the next question, a reminder to you all, you may press star and one to ask a question. We will take the next question from the line of Rishikesh Patole. Please go ahead. Hi, I'm audible.

Can I go ahead?

Sir, quickly on the full year subsidiary sales, what was the number?

Just the subs.

Amit, can you help me out, please? Just the subs. Just give me a mock, cheers this time. It's around the 500 cupboards.

Okay, and just to follow up on that on subsidiaries, I mean, you mentioned Brazil on the previous for the answer on the previous participant, Brazil doing well.

And what about Canada and other markets?

I mean, do we expect CIMA to come through this calendar year in Canada? And how probably not SEMA than any other products in Canada?

No, we have other oncology products which are coming through both in Brazil and Canada. SEMA, we don't have a family in Canada yet. I think we are working on a few things. No, no. In the first way, we are not there in SEMA. But our oncology pipeline is there in both Brazil and Canada. And that's what is going to drive the illness.

And my second question is on the M&A. I mean, post-adcock, we have said we are looking for one more. I mean, how is the progress there? Any update?

We're looking at a couple of transactions. I think, as Amit said, we have about 2,400 gold net cash. So very comfortable we can look at one or two large acquisitions. So we're looking at different things. As of now, I don't have an update, but hopefully we'll be able to achieve something in this financial year.

Thank you. We will take the next question from the line of Udaya Prakash from Value Research. Please go ahead. Odaya, please proceed with the question.

Yeah, hope I'm audible now.

Yes, you're audible.

So I just wanted to get a picture on growth beyond FI21. I get that you said that FI21 will be muted here, but FI28 onwards, you know, we can see a ramp up in revenue and profit based on, you know, because exclusivities are losing and everything. So I just wanted to get a better picture of what kind of... You know, medicines are coming up, what therapeutic areas, and most importantly, have we already filed for them, or are the exclusivities just ending at that period and being filed for them at that point, and the verdict will only be known after this. If you could give us a picture.

Okay, let me answer that question. So basically, you know, we made a small mistake, so I just want to correct that before we answer your question. A sub-revenue last year was 730 crores, not 500. Regarding to answer your question about what pipeline do we have, I think we see, we can't name which exclusivity is going to happen which year because a lot of these are bound by confidentiality. We can only disclose them closer to the launch. What I can tell you confidently is that we have some exclusivities will get triggered in the financial year 27-28. And we also have some launches in Brazil and Canada in both 27 and 28, which will drive us. So both US, Brazil, and Canada will drive our earnings. All three markets will drive our earnings. You will see the sub-revenues from 730 grow dramatically. You will also see exquisite revenue coming from the US. In terms, I can't name it, so I thought it was that, but... But I think how much do we see bump in our earnings? I mean, answer the question. I mean, I'd be better able to predict with time, but I think we see that our earnings should compound around 15% to 25% every year, starting from 28. So 27% will be a base year, where we'll settle around 770. From there onwards, we'll be compounded, growing around 15% to 25%, depending on the level of exclusivity and how much market share we do. I think you'll see a more, you know, stable compounding growth rather than the one-offs that you've seen in the past. Henceforth, the next two, three years.

Okay. And the second question is on the South African business that, you know, we made an investment recently. I get that on, in our overall portfolio, it, you know, helps us diversify our revenue growth and everything. But from the business perspective, what is the value that Natco adds for them? Which investment? I'm sorry, I didn't catch.

Which company?

The South African investment that we made.

Oh, yeah, I got your sign. Nice. See, basically, if you look at the world, there are about 10 to 15 markets that you need to be present to be successful. And right now, our position in Adcock is about 35%. Hopefully, over a period of time, we'll be able to increase our shareholding, as in when a major shareholder gives us an opportunity. I think that's the reason we have. See, you've got to look at these things strategically. I mean, you can't look at them in terms of, you know, we're not getting, we're only getting a see-through only on 35. But you have to look at, you're in a number two company in South Africa. And to build a company like that overnight in South Africa wouldn't have been possible without the acquisition. And in a comparative generic environment like ours, it's very difficult to grow organically. You have to grow inorganic. And, uh... And if you, unless you do these gold acquisitions, you're not able to acquire, you know, share and size and scale. This business now is all about scale. You need to be present in those eight or ten countries, have a filing in multiple countries, and able to get scale. You might get wrong in one or two markets, but there will be some market that will work, and then it will give you the ROI and the investment. And the pipeline is going to get more competitive, and this is the only way you can build. And to get share on these new markets, you have to do an acquisition. If you start from scratch, you've seen in Brazil, now we're making money, but it's a 10-year journey. So I think you have to wait that long. So I think if you want to jumpstart things, you need to buy. Otherwise, things won't happen.

Okay. What is the outlook for South African pharmaceutical market in your opinion? Let's say the growth outlook for the next five years. And also, let's say five years later, I know this is a very specific question, but five years later, at a profit level, what is the contribution we think that the investment would contribute to? Let's say around, can we expect something around 15 to 20 percent?

Of our earnings, you're saying? See, right now, it is like, if you look at, if we normalize our earnings this quarter, I think about one, it's about, let me just take a help of a calculator. So, Africa represents about 22% of our earnings right now, of our base earnings. So, it's, you see, there are two things, my friends. One is that we always were very So what we are doing deliberately now is trying to build a diversified portfolio in Brazil, Canada, India, and US so that we can get earnings which are more diversified, which is what we have achieved through the acquisition. Two, we hope, see, we're doing a lot of new initiatives in terms of finding new products, our oncology pipeline, GLP, and on. So the benefit of that, you're able to see over a bit of two, three years. Right now, the return that we're getting is probably only slightly better than bank interest. But over a bit of time, you know, you'll see the benefit where you'll be able to see about 15-40% return on capital, or even more.

But it'll take time, but you need to pay this, you have to pay this patient care. Okay, thank you. That's it for my time. Thanks, Kaurav.

Thank you. We will take the next question from the line of Sudhanshu from Marcilas Investment Managers. Please go ahead.

Hi, am I audible?

Yes.

Yeah. So my first question is regarding the other expense increase on a quarter-on-quarter basis. So it's a speed jump, and as was explained some time ago, it's primarily being driven by R&D expense. So just wanted to know what is driving this surge in R&D expense? Is it like imminent launch, which is leading to filing expenses and other things? And secondly, is it going to the recurring rate at which this expense is expected?

So there are two questions. See, you can't time your R&D expenditure when you start a project. Any R&D expenditure you do is a very long-term investment. Nothing happens within six months or eight months. They all happen four years, five years, seven years. You're investing for the future. In terms of the expense this particular quarter, I think part of it is R&D, part of it is also we had an inventory right now of certain stores and spares. We had a one-time right now. So I think that was the reason it happened. In terms of like R&D expenditure next year, I think we expect to spend about 7% to 9%. And in terms of earnings, we have already budgeted that. And I think our patch assumes this expenditure. You might have one quarter where you'll have higher expense, one quarter you might have higher, you know, profit, but to sort of normalize it over a year, I think, you know, all the expenses are updated and the profit is after that.

Understood, understood. The second question is, there is a corresponding surge also in the other income head. So, what is the reason on quarter-on-quarter basis, other income is rising?

I, that particular, I mean, that typical other income typically tends to be, I tell you what the other income items are. So, typically there is interest income, this PLI income and licensing fee when we, what we call, do product licensing. And in that particular quarter, we had some licensing income for the India launch of Samanglutide, and then we had some other licensing income. So, I mean, these are all like cyclical depending on an event. Specifically, after this quarter, these were the major events.

Got it. And I have one question, which is basically regarding the Simaclutide launch in India. So, you were there in the pen market, I think in the wild market, not in the pen market. So, how has been the outcome so far versus your initial expectation, both in terms of the market size that you are seeing, which is forming up and evolving daily, and your own performance, company's own performance in that addressable market?

It's been a very competitive launch, and I'll be honest with you. And we couldn't launch on day one on the pen for logistical reasons. We launched it a month later. So, we're getting some share, but we're doing better with the wild than the pen. So, unfortunately, wild is the only genetic in the market. Replicate very much. Bump in our earnings, including up. Thank you. We're thinking that we should be able to do about 75 to 100 courses. This is what our expectation is. I mean, the market has been super competitive, but, you know, I think we got a reasonable good start. And I think... The market, in terms of sale, is still with a pen. But the proposition on the why is this, okay. This is the market which is very important. In every market.

If I can ask one more question, in the last couple of calls, you had mentioned about company looking at a few more acquisitions. So if you have got any update on that front, if any target has been identified?

We're running a couple of transactions, but again, nothing has come to a stage where I can tell you something. But these are always ongoing negotiations. When they come to a stage where we can announce, we'll definitely speak about it, but if the question is, are we working on transactions? Yes, we are working on transactions. Two, are we comfortable doing a transaction? Absolutely, yes, we can do it. Anything that will strategically strengthen our business and build geographical distribution. But at this time, I have nothing to look for. Thank you.

Got it.

These are all the questions. Thank you. All the best.

Thank you. Before we take the next question, a reminder to you all, you may press star and 1 to ask a question. We have the next question from the line of SRAM, an individual investor. Please go ahead.

Hello, sir. I'm audible.

Hello, I'm good.

Any updates on NRC 269 source? When is it commercializing?

I think it's too early stage, my friend. At this time, I have nothing much to do for.

Okay, sir. Thank you. Thank you.

Thank you. We will take the next question from the line of Anirudh, Anand Vechel Investor. Please go ahead.

Hello, sir. Good evening. Are we looking to increase our innovative portfolio with the NRC 2694? Are we planning for any other innovative pipelines, Mahesh?

That's the only active one that's running in our internal company pipeline. The other ones, primarily, I think the biggest one that we've done is we've done an $8 million investment in eGenesis. That is probably the most exciting of our innovative pipeline. So that, you've probably seen the news, they are the first company in the world which has done a genetically qualified pig kidney, which was transplanted into a human being. They have done two patients so far. And the patients were able to do well for about six months and then finally they were trying to figure out what the right dose is in terms of immunosuppression so that could take the program forward. This is probably the most exciting one. And this is our main progress as we go along. And in addition to kidney, they're also looking at liver at this time. So I think of the, if you're specifically asking me, most advanced of a, uh, What do you call innovative pipeline? That's probably not the best. So, I think I asked.

Awesome. And are we planning for completing the acquisition in FY27, or is it going to be extended to FY28?

Acquisition, you're saying? I think we're shopping. I think hopefully we'll be able to close something in financially at 27th, but as I said, you know, these things, until it's done, it's not done. So I think we just, if the question is, are we shopping? Yes. Are we hoping to close something? Yes. But, have you closed anything yet?

No. That's very good. Yeah. Thanks. Thanks for all.

Thank you. We will take the next question from the line of Khalid Mohammed from Nirmal Bank. Please go ahead.

Yeah, hi. I just wanted to ask if you have any tentative milestones for eGenesis business?

Tentative milestones? I think once they start doing more patience, you know, and then once they get an idea of... You know, what the right immunosuppression dose is. I think one thing is clear, the fact that the transplant works and the patients are able to do well for about six months itself is a very monumental issue. I think the scheme of things, if you just think. You can put that in a human, and a human being is ready to do well for a few months. The question now is, what's the right immunosuppressant dose which will make it work?

Do you see that happening in over three years, five years, anything?

I think they're trying to recruit more patients. I think my understanding is that they're going to do more transplants in the coming year. So I think in the next 12 to 18 months, I think we'll see more transplants, and then they'll have greater experience in terms of what's the right way to handle these patients. But it's absolutely, you know, exciting work and absolutely breakthrough work. And this will change, you know, science, you know, in a big way. So I'm personally very excited. But these are all, like, you know, moonshots, as you know. I mean, these have reasonable amount of risk. But if you get it right, you know, you know, that 8 million is worth a lot of money. So I think that's very good. So, okay.

Yeah, I shared that, but when do you see the share coming to the top left, like any timeline or what's the quantum that you see?

You can't, I can't tell you something that I have no, even I myself have no idea about. What I can tell you is that's what happens with NC. I think you need to understand that when you do these things, it's a binary event. Either you'll hit it or otherwise it'll just, it won't happen. Peace out, I'm close. Be patient, and, you know, we'll give you patient updates, you know, based on whatever we hear. I mean, they're, you know, they also can, they also update their websites regularly and tell about all the major breakthroughs that are happening on breakthrough events. We just have to be patient. Hopefully, in 12-18 months, they're able to get more breakthroughs, which are more exciting, and then I can come back and report to you. But we just have to be patient.

That's all. Got it. Thank you. Thank you.

Thank you. We will take the next question from the line of Niraj Khal, an individual investor. Please go ahead.

Thank you for the opportunity. Sir, I wanted to ask you about our crop sciences division. I wanted to understand this division, the industry, if you can give any color on that and our business.

I mean, that's a good question. So I think my colleague Rajesh will answer and he'll also tell us about our de-emerging processes. Rajesh, can you speak to me? Yeah, yeah.

Hi, Neeraj. So as you're aware, so we're in the process of de-emerging the business. And one of the primary reasons we felt also it gives a more focused approach because the business, ultimately, the customers are quite different. See, one of the key things we are pursuing as part of our approach is, again, trying to find molecules which are a little differentiated from most of the other players, and the approach that we've taken towards pharma, right, so products which could be unique, which could be patent-controlled, limited competition, so that's the approach that we are taking. So, we have slowly building on overall presence in the market, right? It's been only three, four years of our commercial presence, actually. And so, the past two years has been mostly learning in terms of how the market works and all that. But we believe that once you have a very strong product and with the right offering to the farmers, I think we can do wonders. Thank you. Yeah. So in terms of sale, let's say this year we ended up close to 140 crores, right? And as opposed to a declared number for last year was about 60 crores. So from 140, we certainly have aspirations to grow significantly well. It's also being driven by, you know, product launches as well as the penetrations with the channels. Okay. So, the channel partners that we have, as compared to most of our peers, is still less. So, this is the primary. So, both products, channels, and also the people additions, all these activities are going on. So, I think we're fairly confident going forward. And that's also one of the main reasons for re-emerging and having more focus on the business. Is that good?

Yeah, thanks. That's all from my side. Thank you.

Thank you. We will take the next question from the line of Rahul Chowdhury, an individual investor. Please go ahead.

So, my first question is, follow-up question is regarding the semaglutide pen. I don't see any, like, media or advertisement about the pen launch. You said you've already launched it.

We launched the pen. We said that when we did the announcement, what we said was we want to launch next month. I think we launched it a while in March, and we said that we launched the pen in April. I think that's what we announced. Actually, when the launch happened, we didn't announce again. We thought it was covered in the earlier press announcement. We were not there on day one, so I think that's the reason why we didn't make so much. Typically, when you're day one, you make more noise and make the announcement. The virus was on day one, so that's why we made a little more noise about that.

So, are we selling it through the digital pharma platforms? Like, I don't know, like TataOne, MG, FarmEasy, like, or it's...

I mean, exactly, I don't know. I think they work with different channels. I think that some digital platforms are also selling our products. But, yeah, I think we have, but again, we don't require descriptions and all, so I think you know what the drill is.

Because I'm using NovelTree, DistraRivals, and I'm an Adco investor. I feel very shitty when I have, very sad when I have to buy that, and I can't find.

I understand, but, you know, there are, you know, challenges with that as well, no? I think, you know, I think all the products that we are having in the segmented portfolio are why they have done better than the pet. I think clearly, I think that's fair.

Just one last follow-up question. So, we are 100% in control of what we do. That is our company. And we are going to have a pretty, what do I say, subdued year ahead as per your own. Yeah, absolutely. So, we have a lot of cash. So, are we not at all open to buybacks at a certain price point? Thank you.

I mean, no, no. You ask me a straight question, I'll give you a straight answer. No. I'll tell you a reason for that because my personal belief is cash should be used for an acquisition which will give us more long-term return. And I think there are opportunities where we can diversify our portfolio and build a more strong global footprint company. And I mean, a lot of the, you know, the challenges that we've had, we had the last few years have been great, but they've been very, you know. Because of our concentrated bets. And I think we need to evolve into a more diversified bet as a firm. So that gives you more stable earnings. And for that, you need to do acquisitions. And that's, I think, a superior use of cash rather than buyback can also be considered at the right time. But at this point, no. My thinking is that let's spend money on it.

So, just... For this acquisition that you are planning or targeting, you must have zeroed it down to a specific geography by now?

I can't answer that question, Raoul. We're looking at different deals. When it comes to a certain stage, we'll talk about it. Okay, is it within the country as well, or all outside? I'm actually Polish outside India. I'm not Polish in India. So I think the value is outside India. It's more reasonable compared to it.

Okay. Thank you, sir. Next call.

Thank you. A reminder to all the participants, you may press star and one to ask a question. We have the next question from the line of Rishikesh Padoli from C61 Capital Market. Please go ahead.

Hi, I'm Audible.

Yeah, please.

Yeah, so quickly, this question is to Rajesh. I mean, given the West Asia war and the subsequent cost inflation, what would be the impact on our agriculture business? I mean, we have seen a lot of peers in the...

Yeah, yeah.

But see, one of the things like which Mr. Rajiv also mentioned earlier, the material costs are going up, right? So, we have already seen 25 to 30% increase in the input raw materials. And see, I think even industry, fortunately, most of the procurement for the curry, at least half of the procurement has already been done. So we, you know, with that inventory pre-existing, we are able to still manage at a price. But going forward, it is uncertain. I think that there's likely increases of prices as well. But we are closely monitoring the market and the, you know, the competitive behavior as well before we make our decisions.

But I think pharma is a little more different. Okay, I just want to clarify that. Like pharma, I think, even though there's been increase of summer inputs, we have a reasonable amount of inventory. So the impact of that you'll not see in June and August quarter, you might see it in the later part of the year. And the exchange and depreciation was sort of kind of offset. So, I think, there is an impact, but we are able, at least the export business has not been relatively less impacted than the domestic. I think you see that anybody who's doing export, relatively the impact has been less compared to the people who have exposure to outright domestic business. The aggregate business will have more impact because the exposure is high on domestic sales. But I think as a principle, I'd like to tell you that export business is definitely less.

Thank you. And just to follow up on that, I mean, have any comments for exports?

But for agro, agro business is less, very small.

Mostly it's the domestic. Predominantly domestic companies.

Okay, and the question was just as a date on the plant status. Can you just provide an update from all the plants?

You're breaking up. You're breaking up. The plant status, you're talking about the pharma. USFDA. USFDA status on all the plants. Okay, we have four USFDA facilities in our system. We have two APA plants and two finished dosage factories. In the year 2025, we had inspections in three of them. So, and Kutur, which is our formulation facility, Chennai, which is our APFS facility, and Mekhuda, which is our APFS. So, all three got inspected, and all three got cleared, and we got EIRs. WISAC is a facility that has not had an inspection, I think, nearly, I think, I would say, a long time. So, we're expecting an inspection sometime, just at any moment. So, WISAC is the only one which is pending. Otherwise, the other three have been inspected in 2020, the last financial year.

Thank you.

We will take the next question from the line of Aditya, an individual investor. Please go ahead.

Thank you so much for the opportunity, ma'am. Am I audited? Yes, you are.

Go ahead.

Sir, so I would like to ask the question that you have planned many expansions in foreign countries. So what would be the gestation period of that, and when can we see the returns on the B&L?

I think Brazil we are seeing right now. Canada has been stable. US, we just bought a friend in about a few years ago. Still is losing money, so hopefully this year we will be able to break even. So that's why we just invested. The value of that will take about, I think in my personal view, it will take about three, four years before we start seeing value. So every business is going through a different phase. Indonesia is still losing money. We're going to catch up. So I think if you start from scratch, it takes five to seven years to build a business. If you buy something, then it takes probably two to three years before you start seeing an outcome. But everything is a very long gestation, because just a regulatory approval on a product takes two, three years. So I think that's how the cycle works in our business.

So, sir, just a follow-up question. We are doing this as a strategy for U.S. plus other countries, right, to diversify the whole portfolio and not be dependent on tariffs.

I think we look at our earnings today. I think our earnings probably come from four markets. India, US, Brazil, Canada, and now South Africa. So I would say five countries. Earlier it used to be only US. Now we have five. And the earnings now, these five countries are giving the base profitability now. So I think that's a pretty good diversification that we've done. And this is, and it happened overnight. I mean, when you're saying that this event is like this, you know, it has been about the last 50 years of diligent investment and R&D and filings and market access. We've seen the fruits of that as we...

Okay, so this is last question from my side. Over the last years, we have seen stupendous margins, about 40 to 50%. So do you see that as being stable, or be it contracting or expanding in the future years?

Other than given guidance, I think this way it's going to decline. So as I said, our earnings will, you know, there will be a dip in our earnings this year. Last year, we did, you know, this year, I mean, March, obviously, we did 1,400 crores back, as you're aware. So it's going to drop by half. We're up to about 700, 750, but, you know, things will turn on up.

From the line of Manohar, an individual investor. Please go ahead.

My question is that, is there any chance the company will get a sustainable and stable profits in the future because we cannot endure this rollercoaster like revenues and properties?

See, Manavar, let me answer this in a way that you're comfortable. See, the nature is you need to accept a certain business as a roller coaster. I think our communication has been very clear that you're going to have a couple of good years, then you're going to have one or two years where it's going to be different. That's the nature of this business. I can't come and tell you, when you have the upside, the upside is very strong, and you have extraordinary amount of margins. When things dip, normalize, they're not going to have. And that's the nature of this business. I think as an investor, you need to sort of accept that they're going to have this rollercoaster ride. And what I can do, the best thing I can do, whatever, is tell you that this is a rollercoaster, right? And this is how you need to pay your expectation. And this is how it's going to be. And I'm sorry I don't have a better answer to that question, but that's how it's going to be. But however, having said that, I've been very cognizant about avoiding volatility. And I think that's why we've done all these investments like South Africa and build this front-end in Brazil. Still, you know, in spite of, you know, the volatility, we're able to maintain a pretty good profitability, and I've been doing about, you know, whatever, whatever we projected. It is the way it is, yeah.

My question is that I have been following this NACO company and you for more than two years from now, and you have been very honest with your answers, but is there any chance or your intentions or plans to become a NACO, NACO to be a doctor-ready or a San Farmer-like company?

I always aspire for that one word. I always believe that. But the thing is, true success only comes if you're willing to play the game for the long haul. If you're going to come and say, I'll give you a very honest answer. If you want great things to happen in the next five years, you've got to invest for the long term, which means you need to have the ability to ignore short-term earnings volatility. Because when we're investing in something, we need to believe that. I believe we can build a global company. I think that journey has already started. And I think our investment in Adcock proves that to you. And I think if you look at, you know, Adcock and Adcock turnover together, I think we have passed. This year, we have passed almost touching more than a billion dollars in revenue. So I think in that sense, we have really built a global company. And in all of it, you know, a very modest amount of money that we have had, we are able to build these jackpots and use this money to buy these assets. So I think you just have to be patient. You're going to have one or two years of difficulty, but in the long run, we'll be able to build a stable. Thank you. Next call.

Thank you. We will take the next question from the line of Netan Agarwal from Dam Capital. Please go ahead.

Hi, Ravi, if you can hear me. For the year, if you can just give us a sense on how many filings and all have you done on the R&D side? Any good filings that have happened and how are you looking for the R&D part for the R&D program for the next year?

I think we've done about seven to eight filings. In the U.S., and really good ones, we didn't hit any major first to five. Hopefully, this year, we are trying another eight nights, trying to target a couple of complex and first to five. Hopefully, we'll have one or two this year. That's our expectation.

And just to probe that further, the fact that this year you don't have any major filing, and that is a consequence of what? I mean, some programs didn't play out as expected, or just higher competition than what expected? More competition.

Just more competition. See, generally, the product that we file and there are like seven or eight, we just don't talk much about it because this is a commodity filing. The only special ones are the ones where you want to be the only one on the limited amount of competition. And US is a winner-takes-all game, right? I mean, especially if you're doing an NC-1, chances are most products, you have 8 or 10 or 15 or 20 guys who file one day off. So those, there's not much. So where do you make money? You have to file where nobody else files, or two, you identify something where nobody has filed and suddenly you file and you're first to file. So those are very few and far between. And if you're able to pull off in a three to four year time period, if you're able to pull off even three of those, you've done a great job. So I think we just have to be patient with an eye. With the ball, we're on the ball. I think hopefully we'll pull off another two, three. We've pulled off enough. I mean, look at our five clients there in our investor presentation. We have TF on, you know, on air butinev. We have approved in 30 months. We have Ola Parikh. Hopefully we'll have 30 months on that. So, I mean, we have some, and I think hopefully we'll be able to build a pipeline up another three or four, so then we have something to talk about for the next seven to eight years.

Right. And secondly, if you can give us some more sense on the size of the businesses in Brazil and Canada, and how do you see Brazil, Canada, and some of these other emerging markets playing out, non-US markets playing out for you going forward?

So what I can do is like, so I think our Brazil turnover of our staff this year was about 257 crores, plus we have some billing directly from India. So maybe that's just about 30 crores, I don't collect the number, but 280. So we are expecting that business should go to 55 to 60 million this year. So that is one big bump we're seeing in our numbers. Canada, which we are expecting, will grow around 10 to 15%. It's already a fairly comfortable business. We have a couple of big launches, but that's in 27-28, not in 26-27. So, that's one. Then, obviously, South Africa is going to get added. So, I think that's where we are. These are the major ones that are driving.

Sorry, what size did you say that Canada was this year?

Canada this year is 229 crores.

Okay, okay. Thank you so much.

Thank you so much. Thank you.

Thank you. We will take the next question from the line of Anirudh, an individual investor. Please go ahead.

Hello, sir. Thank you for providing the opportunity again. So, you mentioned that from FY28, we will be seeing groups. So, can we expect the approval for those cancer pipelines that we are planning to launch in Canada and Brazil by H2 of calendar year 27?

I think the products we're going to launch in 2028, when are we expecting approval? Is that the question?

Yeah, so when are we expecting the approval for those medicines? Is it within the H2 of FY27?

Yes, H2 of financial year 26-27 are expecting approval. Based on that, we expect the earning impact will be in 27-28.

I got it. And my second question is, what is the expected revenue contributions from those medicines that we are launching in Canada and Brazil?

I think the expectation is that, you know, we have already given, spoke about Brazil should do very well this year. And I think that we said that we did about a little less than 300 cores this year. Brazil, that will go to probably 55, 60 million. In terms of revenue-wise, we're not splitting, but what we're saying is that... 27, 28, based on our pipeline that we're able to grow around 15 to 25.

Thank you.

This is my last question. The next caller will be my last question. Thanks.

Thank you. We will take the next last question from the line of Khalid Mohammed from Nirmal Bank. Please go ahead.

Uh, yes. So with the acquisitions that I'm seeing and the strategy that Natco is going to take for the longer term, like you mentioned, uh, more stable revenues and earnings, right? So going ahead, uh, what sort of, uh, you know, uh, do we see, uh, say the, uh, jackpot kind of, uh, business and the stable kind of business, if you could throw some light on that?

This year is all driven by the base business. We don't have any big launches this year.

Not this year. In the next five years, that sort of timeline.

I think some of the exclusives will kick in. I think the biggest one, obviously, is Samad Lutein. I can't tell you which year where we're expecting launch because they're all gone back on digital.

I mean the acquisition that we have done, so that is to bring more stability, right? Correct. NatCo's legacy is a jackpot kind of place, if you get me, right? Right, right, right. Okay, sure. So in that sense, where do you see NatCo in the next five years?

I think in the next five years, our vision is that we are able to build a global company which has more geographical diversification and bring less volatility in our earnings. However, having said that, if you look at the business today, we don't have those special complex filings. Your earnings are not coming. There are no earnings. We'll look at... Any of our top companies, I don't speak for myself, I speak for any of the top-year companies. If you remove the first wave generic launch or the conflict generic out, the earning contribution of these products is representing about 50 to 60% of the earnings or 70% of the earnings depending on which company you're talking about. I think what we can strive to do is to bring about more, less volatility in earnings. So, let's say, in an ideal world, I would want a base revenue to contribute 70% of our profit, and the first pile or special product to contribute 25% to 30%. Earlier, the ratio was the other way around. So, I think that's what we're trying to correct, so that we can bring less volatility. That is the objective in the next part. Is that to answer your question? Yeah. Yes, yes, yes. Thank you. Thank you, everyone. Thank you. Thank you so much. Thank you all. Take care.

Thank you very much. On behalf of 361 Capital Market Private Limited, we conclude this conference. Thank you, everyone, for joining with us today, and you may now disconnect your lines. Thank you.