Natco Pharma Ltd Management Discussions

Economic Environment

Global Economic Environment1

The world economy suffered setbacks yet recorded steady growth of 3.3%, as weak performance in Europe was offset by strong expansion in the United States.

Global inflation continued to moderate, with an annual average down from 6.6% in CY2023 to 5.7% in CY2024, driven primarily by advanced economies returning toward their inflation targets. The US Federal Reserve reduced interest rates, to stimulate liquidity into the economy, by 25 basis points for a total cut of one percentage point over the past year, bringing rates to 4.25–4.50%.

Governments across the globe have taken selective policies, such as financing infrastructure development, widening social protection programs and providing incentives to businesses-to shore up their economies and insulate from geopolitical shocks. Investor sentiment was subdued by Middle Eastern and European geopolitical tensions, weaker growth in China and policy changes in the US, as indicated by increasing bond yields in most advanced economies.

1https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/world-economic-outlook-april-2025

In developed economies, governments have introduced structural changes that harness digital technologies and green investments to tackle demographic changes and productivity differentials. At the same time, emerging and developing economies have registered sustained growth, boosted by softening inflationary pressures and strong manufacturing bases.

Outlook

Global GDP growth is projected to moderate to 2.8% in 2025 and 3% in 2026 term as policy makers adapt policy and trade uncertainty continues. Ongoing disinflation is anticipated amid a slowing labour market and decreasing oil prices owing to increased output and weak Chinese demand, potentially triggering divergence between European and US central bank monetary policies. Global headline inflation is expected to decline to 4.2% in 2025 and further to 3.5% in

2026. According to the IMF, inflation in advanced economies is anticipated to return to central bank targets, in contrast to emerging and developing economies, where inflation may persist at higher levels.

Healthy aging policies, technological innovation, and increased labour force participation-particularly among older workers and women-can reduce fiscal pressures and promote growth. Keeping credible monetary and fiscal policies in place will anchor inflation expectations in all economies. Sound budget management is necessary to maintain financial buffers, and investment in robust infrastructure can raise long-term productivity. Structural changes combined with increased international cooperation will guide through uncertainty, leading to both domestic and global economic stability on a more sustainable growth trajectory.

Indian Economic Environment2

Indias GDP grew by 6.5% in FY2025, demonstrating strong resilience in the face of global economic uncertainty and geopolitical tensions. Urban consumption has moderated, with rural demand holding up due to strong agricultural production. The services sector drove the growth again, while manufacturing exports in high-value sectors like electronics, semiconductors, defence products, and pharmaceuticals remained robust despite supply chain interruptions in the Red Sea.

Fiscal control maintained the deficit at 4.4-4.5% of GDP, leaving room for further government expenditure to propel demand. A rise in funds for the Pradhan Mantri Jan Arogya Yojana (PMJAY) will increase health insurance coverage, adding to demand for healthcare services. Investment in infrastructure increased by 38.8% from FY2020 to FY2025, and although capital spending in the first half of FY2025 was restrained, increased outlays later this year are forecast to boost demand and induce private investment.

2https://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/0BULL22042025F03F83AE118C4B3B84E662D980C8DE33.PDF

Outlook

In the future, India will continue to be among the global fastest-growing economies, with its growth picking up pace on the back of declining inflation, good monsoons, and robust rural consumption. GDP growth is projected at 6.5% in FY2026 on the back of substantial income tax subsidy in the Union Budget and higher consumer expenditure due to the 8th Pay Commission. Retail inflation is expected to stabilise around 4%, remaining within the RBIs target range.

Ongoing trade tensions and volatile tariffs can constrain export growth and discourage business investment. Supply chain resilience and foreign direct investment diversification will be critical to maintaining export momentum. At home, policies that raise labour-force participation, improve skills training, and raise rural incomes can enhance productivity. Improved migrant integration and targeted upskilling initiatives will also ease potential workforce shortages.

Prudent fiscal policies, wider financial inclusion, and more robust digital infrastructure can sustain buffers against potential shocks. Collective action on trade and investment across the globe, along with coherent and credible policy, will be essential to sustaining external stability and ensuring a sustained path towards inclusive, sustainable growth.

Industry Overview

Global Pharmaceutical Industry3

Global total prescription drug sales was valued at $ ~1.1 trillion in 2024.4 The market is expected to grow annually at ~7.7% over the next five years. By 2030, total pharma sales is projected to cross $1.7 trillion. By type, the prescription segment held the major market share of 87% in 2024.

Global pharmaceutical firms collectively spent over $300 billion on research and development in 2024. They are leveraging technology to expand access, raise awareness and enhance screening technologies that enable early diagnosis and treatment. Through partnerships with other players in the healthcare value chain, these companies provide patient-centric solutions such as mobile apps for personalised support and educational programs that drive clinical outcomes and overall quality of life.

Oncology, diabetes and obesity to lead absolute growth through 2029, while immunology slows due to biosimilars

Exhibit 43: Top 20 therapy areas growth comparison in terms of global spending, const $US

Source: IQVIA Forecast Link, IQVIA Institute, May 2025.

3https://www.evaluate.com/thought-leadership/world-preview-2024-report/

4https://www.spglobal.com/ratings/en/research/articles/250203-pharmaceutical-industry-2025-credit-outlook-is-stable-as-healthy-revenue-growth-mitigates-pressures-13394024

In the next five years, oncology is forecast to add $189Bn in global sales, up from the $108Bn in growth in the past five years. Diabetes growth is expected to slow to $73Bn through 2029, from the $87Bn five-year growth to 2024. Obesity growth is set to more than double to $51Bn from the $24Bn previously. GLP-1 drugs overall across both diabetes and obesity have grown from $17Bn globally in 2019 to $110Bn in 2024, adding $93Bn in five years, with $70Bn of that growth relating to drugs which were initially approved for diabetes. Through the next five years GIP/GLP-1 drugs are expected to be more driven by obesity, as well as potentially other diseases including sleep apnea, cardiovascular risk prevention, and total GIP/GLP-1 spending in 2029 is projected to approach $200Bn.

Outlook

The industry will aim to expedite approval of new treatments, most notably personalised medicines, without compromising on pricing pressures and accessing growing markets. Oncology is expected to lead in terms of value, while immunomodulators will maintain growth momentum. Obesity and central nervous system therapies are expected to drive further expansion.

Industry also will be driven by volume growth, the highest volume growth over the next five years is expected in China, India and Asia-Pacific, all exceeding 3% compound annual growth.

Pharmaceutical companies are expected to navigate an evolving macro-economic environment with caution. As Asia, the Middle East, and Latin America become more populous, biopharmaceutical companies are seeking these markets, while traversing separate regulatory and economic landscapes, to extend access to groundbreaking treatments to unserved patients.

Exhibit 39: Global Medicine Spending and Growth by Product Type

	ORIGINAL BRANDS	NON- ORIGINAL BRANDS	UNBRANDED GENERICS	OTHER	TOTAL
Spending 2024 (US$Bn)
Global	1,184.3	235.3	166.5	163.7	1,749.8
Developed	1,091.6	120.6	124.6	84.7	1,421.5
10 Developed	964.6	70.3	107.0	52.6	1,194.5
Other developed	127.0	50.3	17.6	32.1	227.0
Pharmerging	88.4	106.3	41.1	76.5	312.2
Lower-income countries	4.4	8.4	0.8	2.6	16.1
Constant Dollar CAGR 2020–2024
Global	9.3%	4.3%	4.8%	5.4%	7.7%
Developed	9.4%	5.0%	3.9%	5.0%	8.2%
10 Developed	9.6%	3.7%	3.3%	3.6%	8.2%
Other developed	8.1%	7.1%	8.3%	7.6%	7.8%
Pharmerging	8.4%	3.7%	7.6%	6.0%	6.0%
Lower-income countries	-0.8%	1.5%	3.3%	2.1%	1.0%
Spending 2029 (US$Bn)
Global	$1685–$1715	$270–$300	$170–$200	$180–$210	$2,355–$2,385
Developed	$1,555–$1,585	$135–$165	$120–$150	$95–$115	$1,945–$1,975
10 Developed	$1,370–$1,400	$75–$95	$105–$125	$58–$62	$1,635–$1,665
Other developed	$175–$195	$58–$62	$18–$22	$43–$47	$295–$325
Pharmerging	$115–$135	$120–$140	$40–$60	$80–$100	$375–$405
Lower-income countries	$3–$7	$8–$12	$0.7–$1.1	$2.5–$3.5	$18–$22
Constant Dollar CAGR 2025–2029
Global	6–9%	3.5–6.5%	1–4%	2–5%	5–8%
Developed	6–9%	0.5–3.5%	-0.5–2.5%	0.5–3.5%	5.5–8.5%
10 Developed	6–9%	4–7%	0.5–2.5%	0.5–3.5%	5–8%
Other developed	6–9%	4.5–7.5%	5.5–8.5%	4.5–7.5%	5.5–8.5%
Pharmerging	7–10%	2.5–5.5%	2.5–5.5%	2.5–5.5%	3.5–6.5%
Lower-income countries	4–7%	1–4%	0–3%	1.5–4.5%	2–5%

Source: IQVIA Market Prognosis, May 2025; IQVIA Institute, May 2025.

Global medicine spending, the amount spent purchasing medicines from manufacturers before off-invoice discounts and rebates, is expected to reach US$ 2.3 Trillion by 2028 - growth rate of 6-9% per year. Key drivers of growth through the forecast period include the contribution of new products and the impact of patent expiries, including the growing impact of biosimilars. Higher adoption of speciality medicines for treating chronic, complex or rare conditions in the developed markets and volume-driven growth in the pharmerging markets would also be key pillars of growth

US Pharmaceutical Industry5

The US pharmaceutical market is estimated at $ 639 billion in 2024 and is expected to expand at a CAGR of 6.15% from 2024 to 2033, reaching around $ 1,093 billion by 2033. The United States is the world leader in spending on prescription drugs per capita, accounting for approximately 30-40% of the global market and approximately 45% of the worlds pharmaceutical sales and producing 22% of all medications. Federal policies like the Affordable Care Act and the BIOSECURE Act will have transformative impact on the industry. In the U.S. market for pharmaceuticals, the transformative clinical outcomes of GLP-1 receptor agonists and GLP-1/GIP dual agonists, have set a new benchmark for obesity treatment. These medications, such as semaglutide and tirzepatide, have demonstrated weight loss of up to 25%, significantly outperforming earlier drug classes, which achieved only about 7% weight reduction. The approval of cutting-edge drugs such as CAR-T cell therapies for certain cancers exemplifies the markets growing focus on precision medicine, offering hope for previously untreatable conditions. A notable advancement is the continued progression in immuno-oncology treatments, which are redefining cancer care. The growing market adoption of innovative and modern medicines is another key driver of the U.S. pharmaceutical market. The uptake of biologics, gene therapies, and immunotherapies in oncology, autoimmune diseases, and other areas has been particularly notable.

Outlook

The future of the U.S. pharmaceutical industry in the next five years is defined by continued innovation and major regulatory reforms. Expansion will be driven by innovation in such areas as oncology, obesity and new-generation biotherapeutics, whereas diabetes and immunology spending will decelerate with more competition from biosimilars and pricing pressures. While new product launches will continue to add to market growth, the rate of overall growth is slowing as large patent expirations and the launch of biosimilars chip away at exclusivity benefits.

The Inflation Reduction Act and other policy initiatives are likely to rein in price growth and squeeze profit margins modestly, but not radically, as legislators are still sensitive to the need to reward research and development. The incorporation of new manufacturing technologies, including continuous manufacturing, is improving efficiency and enabling more rapid drug introductions. In the face of reputational issues and bipartisan support for additional drug pricing reforms, the industry is using scientific advancements and regulatory pragmatism to keep pace competitively and bring new therapies to market. Overall, the U.S. pharma sector is positioned for steady, innovation-fuelled growth tempered with continued cost containment and policy oversight.

Key trends in Pharma

Advancements in Biologics, Biosimilars and Personalized MedicineThe increased chronic disease prevalence has created the need for personalized medicines, biosimilars, and biologics, leading to improved patient outcomes. The ongoing innovations in biologics, target drugs, and gene therapies are driving market growth.

Economic and Pricing Pressures

Payersandgovernmentsareusingvarioustreatmentalternatives to make deeper discounts, while precision therapies address smaller patient populations. International trade tensions and policy disruptions led by the US have also influenced investor sentiment. This change diminishes conventional pricing power and challenges pharma companies to reframe their cost structure and value propositions.

Digital Transformation in R&D and Patient Engagement

Artificial intelligence will find approximately 30 percent of new medicines in 2025, reducing preclinical times and costs by as much as half. Analytics powered by AI reduce candidate selection to a smooth-running process, optimise clinical trials and facilitate personalised treatment regimens. At the same time, digital solutions-digital health, mobile applications and wearables are engaging patients in symptom monitoring, improving adherence and sharing data in real-time.

Strategic Investment and Collaboration

Venture capital and M&A activity continue strong, supporting pipelines and speeding market entry. Healthy funding levels and regular acquisitions allow companies to access new technology and diversify risk, while collaborations throughout the healthcare ecosystem drive patient-focused solutions and expand market reach.

Risk Resilience

The capacity to stay adaptive, predict disruptions and rebound from them has become the differentiator in a volatile global environment. Adaptive manufacturing, lean outsourcing and sophisticated risk-management practices enable businesses to react to supply-chain problems, regulatory changes and price reforms without losing steam.

Emerging markets in Pharma

Emerging markets present a huge potential market for vaccines and other childrens medicines owing to their huge birth cohorts. India alone has about 25 million births annually as compared to about 7 million are born in Europe and North America.

Accelerating urbanisation and westernisation of lifestyles are changing disease patterns in most emerging economies. Infection rates are changing, and chronic diseases like diabetes and cardiovascular disease are on the rise. Collectively, these trends present pharmaceutical companies with great opportunities to introduce preventive as well as therapeutic products.

Emerging markets account for about 85% of the worlds population and are expected to experience more rapid expansion in use of medicine, especially in Latin America and Asia, during the next five years. Meanwhile, regulatory agencies in these markets are tightening controls and constantly revising requirements. To succeed, pharmaceutical companies need to develop integrated strategies for regulatory approval, post-launch management and product lifecycle management.

Key Therapeutic Segments

Oncology6

Cancer remains the leading cause of deaths globally. Rising trends in chronic conditions have driven need for early treatment and diagnosis of cancer worldwide. In 2022, 20 million new cases and 9.7 million deaths resulted from cancer.7 Government and non-profit efforts to increase awareness of cancer prevention is driving market growth. The worldwide oncology market was worth USD 225 billion in 2024 and is expected to grow to USD 668 billion by 2034, with a CAGR of 11.5% during this time.

New cases of cancer are estimated to increase by 47% globally between 2020 and 2040. To mitigate the growing risk, Global ActionPlanforthePreventionandControlofNon-Communicable Diseases by the World Health Organisation seeks to decrease premature cancer deaths, cardiovascular disease, chronic respiratory disease and diabetes by 25% by 2025.

The incidence of cancer in India is projected to grow more quickly than the world average, reaching an estimated 1.57 million in 2025. The high prevalence is attributed to a mix of environmental and socioeconomic factors, including high levels of pollution, along with lifestyle and nutrition habits. The market size for oncology is forecasted to increase by USD 2 billion at a CAGR of 19.8% between 2024 and 2029.8

Advanced cancer treatment technologies such as CAR-T cell therapy which reprograms the patients own immune cells to search and kill cancerous cells are gaining momentum with significant progress being made in order to provide patients with treatment accessibility. CAR-T cell therapy has been proven to show considerable success in treating blood cancers.

Cardiology9

The international cardiovascular drugs market was worth $ 150 billion in 2024 and is projected to increase from $ 156 billion in 2025 to approximately $ 215 billion by 2034, growing at a CAGR of 3.62%. The growing number of patients with cardiovascular disease is primarily a result of inappropriate lifestyle habits, a sedentary lifestyle, stress, and work pressure among younger people. Also providing growth to markets, older patients have multiple cardiovascular conditions. Subtle changes in the rhythm and rate of heart activity can be the cause for more use of cardiovascular medications. Since both age groups have greater numbers of cardiovascular diseases, including cardiac arrest, there is sustained demand for the medications.

In 2014-2024, Indias cardiology medications business grew from the size of nearly $ 1.17 billion crore to almost $ 3.5 billion.10 The cardiac segment over the past half-a-decade increased at a pace higher than that of the industry as a whole. The greatest contributor to its growth has been the arrival of innovator molecules, together with consistent power provided by brand veterans.

Diabetology

In the last three decades, the number of people suffering from type 2 diabetes has grown exponentially in countries at all levels of income. For people with diabetes, access to low-cost treatment-including insulin-is necessary for survival. An estimated 830 million people have the condition, most of whom live in low- and middle-income countries. Over half of them do not get any kind of treatment. Both the number of individuals with diabetes and the number of undiagnosed cases have been increasing consistently throughout the decades. In 2021, diabetes and diabetic kidney disease accounted for more than 2 million deaths.11

The global diabetology market was valued $ 70 billion in 2024 and is expected to reach $132 billion by 2034, witnessing a 6.5% CAGR during the forecast period.12 Rising obesity rates, increasingly sedentary lifestyles and increased consumption of unhealthy diets are anticipated to increase diabetes incidence, further driving industry growth.

Indias diabetes market was worth USD 4.8 billion in 2024 and is expected to reach USD 15.4 billion by 2033, equivalent to a compound annual growth rate of 13.1%.13 At present the increasing incidences of diabetes combined with obesity is due to the practice of unhealthy diet, sedentary lifestyle habits

Domestic Market Growth

An improved national economy and increasing per capita income are propelling higher demand for drugs. As family incomes rise, the domestic market expands in terms of volume and value.

Service Accessibility

The launch of the Ayushman Bharat Digital Mission platform, along with the growth of digitally native healthcare services, is automating patient sign-up, prescription filling, and teleconsultations. These improvements are enhancing service reception, particularly among those who are underserved.

has propelled the growth of the market. Growing obesity in working-age adults, combined with increased rates of alcohol intake and tobacco use, are also driving demand for diabetes care solutions higher.

Indian Pharmaceutical Market

Indias pharma sector has become globally renowned as the "Pharmacy of the World," especially for its critical contribution to providing vaccines, lifesaving medicines, and medical equipment during the COVID-19 pandemic and in the future.

The industry is estimated at $ ~58 billion in 2024, is anticipated to expand 2 to 2.2 times by 2030, becoming worth $120-130 billion and $450 billion by 2047, raising Indias share from 3% now to almost 5% by 2030.14 15 The sector is the worlds third largest by volume and fourteenth largest by value, with exports spanning 200 countries and territories, reflecting its strong global presence.16

IndiahasthelargestnumberofUSFDA-approvedpharmaceutical plants outside the US, with more than 3,000 pharmaceutical firms running over more than 10,500 manufacturing units. The industry involves varied product categories ranging from generic medicines, bulk drugs, vaccines, non-prescription drugs, formulations, biosimilars and biologics. India supplies 57% of the APIs on the WHO prequalified list, with its market size valued at $18 billion in 2024.17

Expanded Health Coverage

Continued efforts to expand insurance programs-such as Ayushman Bharat and private health cover-are more people into formal health care coverage. The expansion of coverage translates into wider access to medications and therapies.

Innovation and Export Orientation

Concentrating on high-value products-highly complex generics, biosimilars, new chemical and biological entities, and high-end therapies such as antibody-drug conjugates and gene or RNA medicines-is also making India more export competitive. Pharmas moving up the value chain are opening up new global opportunities.

Outlook

The future of the Indian pharmaceutical sector is optimistic, supported by a mix of domestic demand, international market prospects and strategic changes towards innovation and value-added products.

Many trends are going to drive this path. The transition from volume-led to value-driven growth is imperative, involving specialty generics, biosimilars, new drugs, and cutting-edge therapies like gene and cell therapies.

Digitalisation and the use of artificial intelligence (AI) and machine learning (ML) are anticipated to revolutionise drug discovery, clinical development, manufacturing, and supply chain management. Regulatory simplification, quality improvement, and sustainable manufacturing are also recognised as key enablers for future growth. Meanwhile, the nation is afflicted by an increasing burden of metabolic dysfunction-associated steatosis liver disease (MASLD) due to obesity, diabetes, physical inactivity and insulin resistance among non-drinkers as well which will further accelerate demand for medication.

Indias API export business is projected to rise to $22 billion by 2030 at a CAGR of 8.3%, driven by changes in global supply chains and policy initiatives.18 The biotech industry, with more than 800 core firms and a thriving startup ecosystem, is ready for faster growth, further consolidating Indias biopharma capabilities.19 Strong private equity and venture capital investments are driving innovation and capacity augmentation.

Crop health sciences

About 2.5 billion individuals in the developing world depend on agriculture for their livelihoods. Small farms in countries like India, China, and sub-Saharan Africa contribute about 35% of global production of staple grains-corn, soybean, wheat, and rice. Though their contribution is large, these farmers hardly have access to modern technology, formal training in agronomy, and timely knowledge on climate change, pests, and diseases of plants. Such a knowledge deficit limits them to expand their output and adjust to changing agricultural challenges.

The real Gross Value Added of the Indian agricultural sector has increased by almost double, and agricultural budgetary expenditures have increased more than ten times to H1,22,528 crore during FY2024-25. The Indian government has taken several steps to improve crop health and promote the agriculture sector. The key reforms involve regular MSP hikes, currently a minimum of 50% higher than production levels, and income support under PM-KISAN, covering over 11 crore farmers. The

Agricultural Infrastructure Fund has facilitated investments of H86,798 crore for post-harvest and community infrastructure. Digital programs such as e-NAM have connected markets, covering 1.79 crore farmers and facilitating transparent trade. Efforts of recent years also include research and seed improvement, dairy and livestock sector development, and missions for self-sufficiency in horticulture and pulses.20

Crop protection usage in India stands at 0.37 kg/hectare. H 2 lakh crores worth of crop yield is lost annually due to pests. State governments play a key role in enabling ease of doing business and ease of doing agriculture. India now stands as the 2nd largest exporter of agrochemicals globally, after China, making it a key participant in the global crop protection industry.

Introduction and use of safe, man-made crop-protection products have eased some of the limitations in agriculture. Through the reduction of crop loss to pests and diseases, estimated at some 45% of gross production in the past, these inputs allow farmers to capture a larger proportion of their possible harvest.

Outlook

With increasing global demand for food, smallholder farmers will have to almost double their crop production by 2050 to sustain rural prosperity and ensure food security. Greater availability of such solutions, combined with directed training and information services, can also enable smallholders to increase productivity and contribute more to world food supplies.

The India agrochemicals market size from USD 5.4 billion in 2023 is forecast to increase by USD 17 billion at a CAGR of 11.8% between 2024 and 2029.21 Climate change and crop monitoring have emerged as major threats to growth, leading to the use of new technologies such as artificial intelligence (AI), drone monitoring, and data analysis to maximise resource efficiency and forecast yield variations. Farm mechanisation and digital solutions are revolutionising practice, increasing efficiency in seeding, irrigation, and pest control. The agrochemical industry is changing via research-based innovations in formulation and seed treatment, while brand loyalty and retail networks drive distribution strategies. Sustainability initiatives focus on integrated pest management (IPM), organic farming practices, and water preservation measures to minimise environmental footprint. At the same time, yield forecasting and quality assurance systems ensure productivity is balanced with ecological resilience as agrochemicals become essential but responsive to market forces and climatic realities.

Governments far-reaching reforms are directed to increase farmers incomes, improve agricultures modernisation and make the sector sustainable so that it is a major source of Indias economic and rural development.

Company Overview

NATCO Pharma Limited is a one of the leading globally vertically integrated pharmaceutical company with over four decades of presence with strategic focus in research and development to manufacture niche and complex molecules. Extending its complex chemistry capabilities, it diversified into Crop Health Sciences to manufacture and supply quality crop solutions to farmers in India. The Company creates, produces and sells finished dosage formulations (FDF),active pharmaceutical ingredients (API) and agrochemicals (technical and formulation) API products are strategically used for captive consumption. In the API segment, it has capabilities to develop and manufacture products with multi step synthesis, semi synthetic fusion technologies, high- potency APIs and peptides.

NATCO has seven pharmaceuticals and two agrochemicals state-of-the-art manufacturing facilities today in India. Its five formulation plants are in Dehradun, Kothur, Nagarjuna Sagar, Vishakapatnam and Guwahati. Two API and intermediate units are present in Mekaguda and Manali. Crop health formulation and technical plants are based in Attivaram. All of the Companys facilities adhere to global regulatory standards, such as USFDA, ANVISA, Health Canada WHO and Central Insectides Board Faridabad, India among others.

It provides finished dosages in capsule, injection, and tablet forms, targeting various medical conditions such as multiple sclerosis, influenza infection, leukemia, and hypertension etc. It markets its products in over 50 countries. The key markets are United States, India, Canada, Brazil and it operates in some of markets such as Saudi Arabia, Algeria, Indonesia, Thailand, Australia, Singapore and China etc. The Company has 11 subsidiaries including two step-down subsidiaries. It also operates through partners in regions wherever there no direct presence.

Continuous innovation guides the Companys efforts to add new technologies and capabilities. Its In-house research is directed by the NATCO Research Centre at Sanathnagar and Kothur. The Company spent INR 3,733 million towards R&D in FY25 and endeavours to spend about 6%-8% towards its R&D projects in the future. Being perseverant and determined for a positive outcome it has established a strong footing for itself over the last many decades.

NATCOs strategy emphasises developing low-competition molecules and complex therapies. It remains committed to its core strategy to target niche molecules. Growth is driven through both organic research and strategic partnerships. It is on a path of global expansion where it is adding more products in its portfolio in various emerging markets. The company remains committed to cGMP norms and high-quality standards. NATCO is well placed to capitalise on anticipated growth across its major complex therapy areas. It is also selectively evaluating inorganic opportunities to expand its presence in international markets.

Business Segments

The company operates in two major business segments, pharmaceuticals and agrochemicals. The pharmaceutical business is the revenue driver for the company, where the exports formulation is a significant contributor followed by domestic formulation, APIs and agrochemicals.

The Company has a growing global reach with its products shipped to more than fifty countries across the globe. Its FDF offerings are marketed in the United States, India and the rest-of-world markets. US market is the major contributor in terms of revenue for the company, followed by India, Canada and Brazil.

The API division is strategic in nature and caters to captive consumption as well as is sold to global pharmaceutical companies in the USA, Europe, and Brazil.

Their proficiency in organic chemistry and ability to target niche molecules acted as a catalyst to diversify into the Crop Health Science business. The product portfolio has a range of quality pesticides/insecticides and bio stimulants & growth promoters for safe and efficient management of pests, insects, diseases and weeds across a range of crops. The company is focused on providing greener and cleaner solutions to farmers to yield better crop outputs.

Pharmaceuticals Domestic Formulations

NATCOs formulations domestic operations are key drivers of the business, segmented into four business units comprising of Oncology, Pharma speciality, Cardiology and Diabetology. NATCO is the pioneer and the market leader in the branded oncology targeted therapy segment and since inception has led the charge to improve accessibility of treatment solutions to the patients in India.

Domestic formulation sales

(rs. Million)

FY25	4,000
FY24	3,867
FY23	3,749
FY22	4,711
FY21	4,101

Oncology

With over two decades of presence NATCO maintains a leadership market share in the oncology division among Indian companies. Its oncology franchise includes haemato-oncology and solid tumour treatments. It has introduced several targeted therapy medicines in oncology. Its pipeline consists of molecules that are of pivotal therapeutic significance in the treatment of malignancies of blood, liver, kidney, lung, brain, breast, ovary.. The in-house NCE oral molecule targeting metastatic/recurrent head and neck cancer is undergoing phase II clinical trials in India and the US.

All oncology products are produced in state-of-the-art facilities that have been certified by major international regulatory bodies. This dedication to quality and reliability has gained the confidence of oncologists, world-renowned medical centres, patient associations, non-governmental organisations and the wider healthcare community.

Domestic formulation sales

(rs. Million)

FY25	2,324
FY24	2,166
FY23	2,395
FY22	2,254
FY21	2,411

Pharma specialty

NATCOs Pharma Specialties segment concentrates on orthopaedics, gastroenterology, Virology, Rheumatology, Hepatology and Critical Care.

Its orthopaedics portfolio encompasses the leading bisphosphonate therapies, either oral or injectable. All of them were the first-to-market in their respective categories and have established high brand recall with healthcare providers over time.

In the field of gastro-hepatology, NATCO is a dominant player in Hepatitis-B and Hepatitis-C treatments in India. Velpanat brand, Sofosbuvir and combination is a high performing brand in the segment.

Cardiology

NATCO founded its Cardiology in early 2017 with the aim to achieve its vision of making specialty drugs universally available.

The existing cardiovascular portfolio consists of a complete gamut of antihypertensive drugs, headed by Cilnidipine and its combinations (NATCOCIL and associated brands) approved as first-line hypertensive agents. It also boasts Ivabradine (IVABRATCO) as a treatment for stable angina and chronic heart failure. The divisions anticoagulant portfolio consists of new oral anticoagulants-DABIGAT? (Dabigatran), APIGAT? (Apixaban) and Rpigat? (Rivaroxaban)-in addition to the antiplatelet agent TICAGAT? (Ticagrelor).

Diabetology (NAT-REACH)

Within the diabetology division, NATCO offers extensively prescribed DPP-4 inhibitors Vildagliptin and its fixed-dose combination with Metformin, Teneligliptin and its Metformin combination, for the treatment of type 2 diabetes mellitus in high-prevalence markets. The company is aggressively developing a pipeline of next-generation products aimed at differentiating its products with a focus on key brands to strengthen therapeutic positioning.

Non-oncology sales

(rs. Million)

FY25	1,676
FY24	1,701
FY23	1,354
FY22	2,517
FY21	1,690

Export Formulations

NATCO has over three decades of experience in targeting niche and complex molecules. Over the years, it has extended the depth and the breadth of the portfolio to cater to the export markets. This is on the back of a global filing strategy adopted by the company, which has started to deliver success for the company. In the US, it predominantly a partnership driven business model that capitalises on its own strength of research & development and the partner excels in litigation and distribution of the product. The company has also incorporated its own subsidiaries in US, Brazil, Canada, Indonesia, Singapore, Philippines, the UK and Colombia, to set up frontend presence in these markets. It has a formidable presence in Canada and Brazil amongst the products that are being marketed. Additionally, it gets market access through business partnerships in some of the other Asia Pacific, Middle East and other regions.

The company expects to file a greater number of products in the export markets to drive growth. It also has healthy cash reserves, as a planned strategy to build on the strong foundation that it has created over the years, it plans to utilise the cash for making acquisitions to augment its core business.

Export formulation salest

(rs. Million)

FY25	37,597
FY24	32,369
FY23	20,632
FY22	11,842
FY21	10,771

The company has a unique strategy to focus on niche generic molecules with limited competition which are going off-patent in the US market. NATCO has a partnership-based model in the US wherein it leverages its own strength in product development and manufacturing alongside partners strength in sales and distribution. Sun Pharma, , Alvogen, Teva, Mylan, Actavis, Lupin, Breckenridge Pharmaceuticals and Dr. Reddys are some of the major partners in the U.S.

In FY25, revenue from the US business amounted to INR 31,487 million, compared to INR 28,048 million in FY24. The Company has 50+ approved Abbreviated New Drug Applications (ANDA) and 28 Para IVs in the pipeline with 5 tentative approvals. During the year, the Company submitted 5 ANDAs and got approval for 3 ANDAs with the United States Food and Drug Administration (USFDA).

Key solo FTFs (Para IV) in the pipeline (as at 31st March 2025)

Brand	Molecule	Therapeutic Segment / Primary Indication
Kyprolis	Carfilzomib	Cancer / Multiple
	(10mg)	Myeloma
Imbruvica	Ibrutinib (tablet)	Cancer / Leukemia
Zydelig	Idelalisib	Cancer / Blood and Bone Marrow Cancer
Lynparza Ozempic	Olaparib Semaglutide pen (8mg/3ml & 2mg/3ml)	Ovarian / Breast Cancer Diabetes
Balversa	Erdafitinib	Bladder Cancer
Wegovy	Semaglutide (all strengths)	Weight Loss
Tabrecta	Capmatinib	Cancer / Lung Cancer

Key Para IV products in the pipeline

Brand	Molecule	Therapeutic Segment / Primary Indication
Eliquis	Apixaban	Anticoagulant
Ozempic	Semaglutide pen (2 strengths)	Diabetes
Pomalyst	Pomalidomide	Cancer / Multiple Myeloma
Lonsurf	Trifluridine / Tipracil	Metastatic colorectal cancer
Yondelis	Trabectedin	Advanced soft-tissue sarcoma / Ovarian cancer
Calquence	Acalabrutinib	Cancer / Blood
Kyprolis	Carfilzomib 60 mg/ml	Cancer / Multiple Myeloma
Nurtec	Rimegepant	Migraine
Jevtana	Cabazitaxel	Cancer / Prostate
Evrysdi	Risdiplam Oral Solution	Spinal Muscular Atrophy
Zepzelca	Lurbinectedin	Central Nervous System

Canada Market

NATCO Pharma Canada Inc. is the wholly owned subsidiary that was founded in 2012. Having its headquarters in Toronto, it is . backed by a focused local quality assurance, regulatory affairs, and sales team. With six to eight regulatory filings annually as its goal, the Company has been delivering on-and frequently exceeding-these targets.

In FY25, the revenue was INR 2,213 Million, with more than 20 products approved to market and 10+ filings in the pipeline for approval, it is poised for robust growth in the years to come.

Natcofarma Brasil, the Brazilian subsidiary of NATCO Pharma Limited, supplies quality drugs that meet international standards to increase patient access. It specialises in launching generic medications in Brazil for oncology, hematology, cardiology, neurology and primary care. This arrangement is a testament to its continuous drive towards innovation and research in the introduction and development of generic drugs.

In FY25, the revenue was H 1,160 million it continues to file good number of products where there is limited competition.

Asia and other emerging markets

NATCO Pharma has received approvals from the Health Sciences Authority (HSA) for niche oncology formulations for breast cancer, blood cancer, and supportive care in cancer therapy. IT has achieved regulatory clearances and introduced branded generics in the tender and private markets in Singapore. The Company has its presence in China with the success of Oseltamivir capsules and has marked its entry into Saudi Arabia and Algeria regions by winning a government tender. It has established a subsidiary in Colombia. It also has significant presence in the markets of Thailand, Vietnam, Philippines, Indonesia and Australia.

In the rest-of-world (RoW) markets, NATCOs portfolio concentrates on hepatitis C and anti-cancer formulations. The firm has been able to commercialise these products successfully in prominent countries like Vietnam, Mongolia, Myanmar, and Venezuela.

NATCO utilises several channels to increase its reach including wholly owned subsidiaries, direct partnerships with local partners in certain geographies and worldwide distributors to cover smaller markets.

APIs

Building on its technical and operating excellence NATCO has developed and commercialised niche APIs for over two decades. An unwavering commitment to quality and following current Good Manufacturing Practices (cGMP) is at the foundation of its mission to deliver innovative, cost-efficient drug substances and increase patient access globally.

Originally concentrated in oncology, NATCOs portfolio of APIs has grown to cover over fifty Drug Master Files (DMF) and now extends to central nervous system treatments, pain management drugs, and cardiovascular care molecules. The firm applies its intellectual property capabilities, manufacturing expertise, and regulatory knowledge to develop first-to-market opportunities for its clients.

NATCO has two state-of-the-art API manufacturing facilities where over half of the campus space is preserved as Green Belt, embracing its fundamental value of environmental health and safety. Both plants have received successful regulatory clearance and audits from regulatory bodies such as the U.S. Food and Drug Administration, Australias Therapeutic Goods Administration, the Hamburg Health Authority, Japans PMDA, South Koreas KFDA, Mexicos Cofepris, and the European Directorate for the Quality of Medicines (EDQM).

Segment Breakdown

Revenue Division	FY21	FY22	FY23	FY24	FY25
API Revenues	5,120	2,481	2,103	2,492	2,018
Domestic Formulations	4,101	4,771	3,749	3,867	4,000
International (including subsidiaries)	10,771	11,842	20,632	32,369	37,597
Crop Health Sciences	21	51	409	1,083	598
Other Operating and Non-Operating Incomes	1,544	1,293	1,224	1,458	3,627
Total Revenues	21,557	20,438	28,117	41,269	47,840

Crop Health Sciences division (CHS)

The strong organic chemistry skills acted as a catalyst to the idea of diversifying into the agrochemical business. Leveraging its techno-legal capability NATCO CHS has achieved significant breakthrough since its inception in 2021. It focuses to provide innovative and green chemistry-based pests and biological crop solutions to farmers which result in higher crop yields. It also pioneered the launch of the first pheromone-based mating disrupting product aimed at effectively managing the pink bollworm pest infestation in cotton crops. Moving forward, it will focus on expanding its portfolio to broader to range of pesticides, insecticides and bio stimulants which will cater to a variety of crops and markets.

Financial Overview

NATCOs consolidated revenue from operations for the year stood at H 47,840 million for FY25 as compared to H 41,269 million for FY24. EBITDA for FY25 stood at H 25,505 million at 53.3% of revenue. PAT amounts to H 18,834 million for FY25 at 39.4% of revenue against H 13,883 for FY24.

Metric	FY 2025	FY 2024
Total Revenue* (INR million)	47,840	41,269
EBITDA* (INR million)	25,505	18,795
EBITDA Margin* (%)	53.3%	45.5%
Profit before tax (PBT) (INR million)	22,914	16,735
Profit after tax (PAT) (INR million)	18,834	13,883
PAT Margin (%)	39.4%	33.6%
Reported EPS (Basic & Diluted) (INR)	105.26	77.34
Networth (Includes NCI) (INR million)	76,123	58,531
Return on Equity (%)	24.7%	23.7%
Return on Capital Employed (%)	30.1%	28.5%

ROCE = Earnings Before Interest and Tax (EBIT) / Capital Employed (Total Assets – Current Liabilities); ROE= Net Income/Shareholders Equity (networth) *includes other income

SWOT Analysis

Strengths

Market Leadership

• Robust market standing in oncology with nine products with sales in excess of H100 million and twenty-five brands holding leading positions across therapeutic classes.

Financial Performance

• Robust financial performance demonstrating revenue CAGR of 15 %, EBITDA CAGR of 25%, and PAT CAGR of 28% over the past decade.

• Impressive growth trajectory with consolidated revenue of H 47,840 million in FY25, marking a 16% increase from the previous year.

Product Portfolio and Capabilities

• Strategic concentration on niche and complex molecules with low competition, building sustainable competitive advantages in differentiated markets.

• Vertically integrated business model enabling manufacturing excellence across state-of-the-art plants adhering to strict regulatory compliances.

• Penetrative outreach to 60,000 doctors and 1,000+ distributors serviced by a team of 850+ sales professionals maintaining strong market coverage.

Global Market Presence

• Ranked among the top 10 generic companies in sales in Canada with a strong international presence.

• Strategic plans for expansion based on consolidating positions in Southeast Asia, MENA, and LATAM regions to broaden revenue base.

• US Biosecure Act provides opportunity to expand revenue from the nation.

Weaknesses

Market Concentration and External Factors

• Reliance on major markets exposing vulnerabilities to regional regulatory shifts and market forces.

• Pressure on prices due to government measures to contain drug costs potentially affecting profitability margins.

Competitive Landscape Challenges

• High competitiveness in the generic pharma business demanding relentless innovation to stay ahead in the market.

• Regulatory needs to comply across several jurisdictions introducing operational complexity and cost pressures._

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Opportunities

Government Initiatives driving industry growth

• Indias pharma market expected to grow to US$450 billion by 2047, with vast growth opportunities in the domestic market.

• Production Linked Incentive (PLI) scheme favouring financial investment in pharma production and innovation.

• Vision of Viksit Bharat 2047 offering a holistic framework for pharma sector growth and international competitiveness.

• Government setting up Bulk Drug Parks with H3,000 crores financial aid enhancing pharma production infrastructure.

Technological Innovation

• Digitalisation and AI/ML implementation providing ways to improve the efficiency of drug discovery and clinical development operations.

• Opportunities for growth in emerging markets presenting ways to diversify revenues outside of traditional stronghold areas.

Healthcare Trends

• Growing healthcare expenditures worldwide and locally driving demand for pharmaceutical products in all therapeutic categories.

• Emerging emphasis on sophisticated treatments driving market opportunity consistent with NATCOs capability in intricate generics.

Threats

Operational and Market Risks

• Geopolitical unrest and supply chain disruptions that could impact worldwide operations and production capabilities.

• Regulatory complexities across markets with ongoing need for flexibility to adjust to changing compliance needs.

• Exchange rate fluctuations affecting bottom line for export-based operations.

Competitive Pressures

• High level of competition requiring frequent innovation and flexibility to keep up with shifting market trends.

• Government policy-driven pricing pressures on profitability in pharmaceutical markets.

Outlook

Over the last twelve months, the Company has launched over five products across oncology, hepatology, gastroenterology, critical care, cardiology and diabetes. Moving forward, it expects to introduce additional offerings during the next two to three years. The Company anticipates that the domestic launch of Semaglutide will significantly drive its non-oncology revenues during the coming fiscal periods.

Its strong manufacturing base, backed by backward integration into active pharmaceutical ingredients manufacture, continues to drive the growth trajectory and operational efficacy of the company.

To further boost its global reach, the company is considering inorganic expansion opportunities outside India-in particular, in the US and other strategic markets-through selective acquisitions and alliances.

The company has also introduced sustainability practices to minimise its ecological footprint. Renewable energy now provides 25.8% of its total power usage, reducing emissions of carbon. Water conservation involves increased utilisation of recycled water, and all manufacturing waste is handled and disposed of in accordance with strict environment standards.

Cautionary Statement

The statement made in this section describes our objectives, projections, expectation and estimations which may be ‘forward-looking statements within the meaning of applicable securities laws and regulations. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised by the Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments.