Natco Pharma Limited reported a 57 per cent year-on-year drop in consolidated net profit for Q1 FY27 (April–June 2025), as sharply lower sales of its generic cancer drug lenalidomide dragged down both revenue and operating margins. The Hyderabad-based pharmaceutical company's net profit fell to ₹206.5 crore from ₹480.3 crore in Q1 FY26, according to its stock exchange filing.

Revenue Takes a Steep Hit

Revenue from operations declined 44.7 per cent to ₹735.2 crore in the quarter, down from ₹1,328.9 crore in the year-ago period. The company attributed the contraction primarily to lower revenues from lenalidomide, its generic version of the blockbuster multiple myeloma treatment, which weighed heavily on the international business.

Despite the revenue compression, total expenses were brought down to ₹608.8 crore from ₹818.7 crore in the corresponding quarter — a partial cushion against the earnings decline.

Operating Margins Contract Sharply

EBITDA fell 67.4 per cent year-on-year to ₹186 crore, compared with ₹571 crore in Q1 FY26. The EBITDA margin contracted to 25.3 per cent from 43 per cent a year earlier — a near-18 percentage point compression that underscores how dependent Natco's profitability had become on lenalidomide exclusivity revenues.

Segment Performance: Domestic Steady, International Slumps

The domestic formulations business offered a relative bright spot, with segment revenue rising to ₹136.4 crore from ₹107 crore in the year-ago quarter. The active pharmaceutical ingredients (API) segment also improved, with revenue climbing to ₹66.7 crore from ₹52.6 crore.

In contrast, international formulations — the segment most exposed to lenalidomide — saw revenue plunge to ₹477.1 crore from ₹1,120.9 crore, a decline of more than 57 per cent. This segment had been the primary earnings engine during periods of limited generic competition in key markets such as the United States.

Board Approves Dividend and ₹2,000 Crore Fundraise

Alongside the quarterly results, Natco Pharma's board approved an interim dividend of ₹1.50 per equity share. The board also cleared a proposal to raise up to ₹2,000 crore through a qualified institutional placement (QIP) and other permissible instruments, signalling the company's intent to build financial headroom for future growth initiatives even as near-term earnings remain under pressure.

With lenalidomide revenues likely to remain subdued as generic competition intensifies, Natco's ability to scale its domestic formulations and API segments — and deploy the QIP proceeds productively — will be closely watched by investors in the quarters ahead.