Analysts at Anand Rathi say that after Copaxone, Natco’s next big launch could be anti-cancer drug Revlimid generic (scheduled for March 2022). Others like immunosuppressant Afinitor generic and oncology drug Nexavar (Sorafenib) could also be explored after FY21.
Lack of significant launch visibility has led analysts to estimate net profit numbers to be little changed next year.
Analysts at Jefferies expect flat FY20 earnings versus FY19, led by lower Copaxone gains, and foresee a cut in earnings from 9-20 per cent over the next couple of years. Nevertheless, the company has a strong pipeline and has had a history of surprising the Street with new launches, say analysts.
The Jefferies analysts add that despite near-term earnings looking weak, Natco has strong drivers after FY20, led by its US pipeline, and the ramp-up in India as well as rest of the world. They expect 25 per cent growth after FY20. Domestic growth for the firm is looked at with confidence given the Hepatitis-C segment sales are stabilising and the oncology segment is doing well.
The company is looking at other geographies (Brazil, Canada, China) and other businesses (agrochem) to drive growth. Target prices by Anand Rathi, ICICI Securities, and Jefferies, nevertheless, indicate 10-47.5 per cent upside from the current levels for the stock.