Shares of Natco Pharma Ltd surged nearly 9% in early trade on Wednesday after the company reported over sixfold jump in net profit for the September quarter on improved margins.

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However, the pharma stock retreated from early highs to trade more than 1% lower. Natco Pharma shares opened sharply higher at ₹869.95 apiece, up 8.75%, on BSE following the release of strong quarterly numbers.

However, the stock failed to maintain momentum and pared gains to touch a low of ₹777.1 per share later in morning deals, down by 1.86% over the last close.

The Hyderabad-based company announced its financial results for the September quarter, on Tuesday, which were in line with analyst expectations as numbers were aided by opportunities such as Revlimid generic.

The company reported earnings per share of ₹20.6 in Q2 of FY24 against ₹3.11 in the year-ago period.

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Net profit of the company soared more than sixfold to ₹369 crore in the September quarter compared to ₹56.8 crore in the September quarter of FY23. The Q2 profit beat the street estimate of ₹347.9 crore.

Revenue of the company jumped to ₹1,031.4 crore in Q2 of FY24 against ₹432.1 crore in the year-ago quarter and the street estimate of ₹1,061 crore.

Its operating profit or EBITDA at ₹458 crore was slightly lower than the street estimate of ₹467 crore. The EBITDA was ₹54.35 crore in the September quarter of FY23.

Margins were also better at 44.4% in Q2 of FY24 against the street estimate of 44% and 13% in Q2 of FY23.

Natco Pharma manufactures finished dosage formulations, active pharmaceutical ingredients and crop health science products, and also provides contract manufacturing services.

Natco Pharma shares were trading 1.69% lower at ₹780.35 apiece on BSE at 10.06 AM.

Also Read: Wockhardt Q2 Results: Shares rise after September quarter losses narrow, margin expands

(Edited by : Asmita Pant)

First Published:Nov 15, 2023 11:13 AM IST