Natco Pharma has released its financial results for the second quarter ended 30 September 2025 on 14th November 2025, reporting a softer performance compared to the same period last year. The company, which is a prominent player in India’s Pharmaceuticals sector, saw its quarterly profitability affected by higher research and development (R&D) spending, bioequivalence-related costs, and a one-time employee bonus. These factors collectively shaped the overall outcome for the quarter.
Profit and Revenue Performance
Natco Pharma’s consolidated net profit for Q2 FY26 stood at ₹517.9 crore, reflecting a 23.44% year-on-year decline from ₹676.5 crore reported in the previous fiscal’s corresponding quarter.
Revenue from operations was ₹1,363 crore, a marginal dip compared to ₹1,371.1 crore last year. Despite this, the company’s total income rose to ₹1,463 crore from ₹1,434.9 crore, supported by an increase in other income to ₹100 crore from ₹63.8 crore.
Higher Expenses Influence Quarterly Results
Natco Pharma recorded total expenses of ₹849.3 crore, significantly higher than ₹616.7 crore in the same quarter last year.
The company highlighted that this rise was driven by:
- Substantial R&D spending, particularly on bioequivalence work
- A one-time employee bonus
- Additional business-related provisions
These investments contributed to the reduced quarterly profit but underline the company’s commitment to long-term product development and organisational expansion.
Segmental Revenue Breakdown
The formulations export segment remained the largest contributor, although it softened during the quarter:
- Formulations export revenue: ₹1,147 crore (down from ₹1,211.3 crore)
- API revenue: ₹53.9 crore (up from ₹49.6 crore)
Revenue from crop health sciences grew notably to ₹52.4 crore, compared with ₹14.1 crore in the year-ago period.
The contribution from domestic formulations and APIs saw marginal improvements, indicating steady demand within India.
Dividend Announcement
The Board of Directors declared a second interim dividend of ₹1.50 per equity share (face value ₹2) for FY26, reinforcing the company’s continued focus on shareholder value despite a moderated quarterly performance.
Key Corporate Update: Demerger of Crop Health Sciences Division
Natco Pharma confirmed that its Board has approved the incorporation of a wholly owned subsidiary in India, which will become the resulting company for the demerger of its Crop Health Sciences Division.
This strategic move is expected to provide a clearer operational focus and create independent growth pathways for the division.
Market Reaction
On the day of the announcement, Natco Pharma’s shares closed 1.33% lower at ₹815.10 each on the BSE.
Also Read:
- MRF Q2 FY26 Results: Profit Jumps 12% YoY, Revenue Rises 7.2%
- Marico Q2 FY26 Results: 31% Revenue Growth Despite a Slight 0.7% YoY Profit Decline
- Oil India Q2 FY26 Results: Revenue Up 4% YoY While Profit Declines 43%; Interim Dividend Declared
- Tata Motors PV Q2 FY26 Results: Profit Soars to ₹76,170 Crore on One-Time Gain as Revenue Declines 13%
- Muthoot Finance Q2FY26 Results: Profit Jumps 87% as NII Rises 58%
Conclusion
Natco Pharma’s Q2 FY26 performance reflects a temporary dip in profitability due to deliberate investments in R&D, employee incentives, and business provisions. While revenue remained broadly stable, the company’s emphasis on research-driven progress and its strategic decision to demerge the Crop Health Sciences Division signal a forward-looking approach.
As Natco Pharma continues to strengthen its product pipeline and streamline its business verticals, the company remains positioned for sustainable growth in the evolving pharmaceutical landscape.
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