Natco Pharma - Rs.140.00

Incorporated in 1981, Natco Pharma was promoted by Mr. V.C.Nannapaneni as a private limited company to manufacture and market pharmaceutical producs. Today it has emerged as a complete pharmaceutical company with all critical facets necessary for effective value delivery viz., research & development, active pharma ingredient (API), finished dosage production, regulatory submission, marketing & sales. It manufactures a comprehensive range of branded and generic dosage forms, bulk actives and intermediates for both Indian as well as international markets. Its products come in various forms such as timed release capsules, tablets, inhalers, dry syrups, dispersible syrups and suspensions, ointments, gels, injectables, infusions, sterile preparations and large and small volume parenterals. NATCO’s branded products and generic versions of antibiotics, anti-malarial, amoebicides, analgesics, anti-pyretic, peripheral vasodilators, anti-anginal, anti-hypertensives, anti-asthmatic, tranquilizers, anti-depressants, oncologicals, anti-emetics, anti-anemic, nutritional supplements, biotechnology based drug forms and health products of natural origins, which are well accepted in the market.

In addition to research and manufacture of pharmaceuticals, it is also one of the largest contract manufacturers of bulk actives and intermediates for leading Indian and multinational companies like Ranbaxy, Dr. Reddys, Wyeth, Parke Davis, Sun Pharma, Smithkline Beecham, Novartis etc. It is also into contract research for process research and custom synthesis and also conducts clinical trials. To attain a significant position in the oncology segment, NATCO regularly introduces high value niche drugs for treatment of ovary cancer, prostrate cancer, multiple myelomia, leukemia, lung cancer etc., which have become leaders in their respective field. It has another 25~30 products of similar calibre in the pipeline, which will be introduced in FY06. Its 4 manufacturing plants are world class with ultra modern equipments and complying with international standards including USFDA, UKMFA etc. With focus on molecular modeling for New Chemical Entities, Phyto Chemistry, Plant Chemistry, New Drug Delivery Technologies, NATCO's Research Centre is in the forefront of the company's strategy to emerge as a research driven organization. Recently, the company was granted European patent for its invention of soft gel capsules with an innovative drug delivery system. More such developments are likely in future.

Last year, the company successfully raised funds to the extent of USD13.50 million through a fully convertible bond (FCCB) issue for meeting the capital expenditure and expenses connected with the filing of Drug Master Files (DMFs) and Abbreviated New Drug Applications (ANDAs). For the nine months ending 31 Dec. 2004, its net sales grew by 25% to Rs123 cr. and NP increased by 30% to Rs16.5 cr. With several drugs going off patent in coming years and the company’s thrust to become a global player, it may end this fiscal with sales of Rs170 cr. and NP of Rs23 cr., which may increase to Rs240 cr. and Rs35 cr. respectively for FY06. This works out to a forward EPS of Rs10 for FY05 and Rs15 for FY06 on its current equity of Rs23.40 cr. Investors are advised to buy at CMP with a long term perspective expecting 50% appreciation in the coming 12 months. Its share price can even double after 2 years.