When the scorecard came out on May 29, 2026, it was enough to rattle investors. The kind of revenue and margin decline you see in this report usually brings the selling on. Revenue was down 39.5% to Rs 739 crore, and the EBITDA margin has been whittled to 17.2% from 45%. It was a two-pronged hit to both the bottom line and cash flow.
Market reaction
Traders were quick to book profits once the earnings were in the open. On the NSE, the share price made for an intraday low of Rs 1,060, over 9% off, before it gave up more ground to Rs 1,018, or 13.4% from where it had closed the day before.
It did recover some of that to end at Rs 1,023.70, a 12.94% loss. But the scrip had been under some duress for two days running, so the move wasn’t entirely out of the blue.
Earnings snapshot
If you look past the top line, the profit side of the house has cooled off. We’re talking a 77% drop in EBITDA to Rs 127.5 crore, compared with Rs 548 crore last year. And net profit? That’s 34% lower than the March quarter of FY25, when it was at Rs 406.6 crore.
According to the company, a one-off tax advantage made its way through the books this quarter. It was a bit of a buffer for the net profit, but it didn’t do much to counteract the drag from weaker operations and thinner margins.
Here are the key stats for Q4FY26:
– Revenue: Rs 739 crore (was Rs 1,221 crore a year back)
– EBITDA: Rs 127.5 crore (vs. Rs 548 crore)
– EBITDA margin: 17.2 percent (down from 45 percent)
– A 34% year-on-year slide in net profit
Business mix and revenue drivers
The export arm of the formulations business was still the mainstay in Q4, putting in Rs 539.6 crore. Over the course of the year, that segment has been worth Rs 3,234.5 crore, which says it all about its importance to the firm’s earnings.
On the home front, domestic formulations brought in Rs 108.7 crore for the quarter. The API side of the house chipped in with Rs 63.9 crore and Crop Health Sciences with another Rs 22.6 crore.
Add in some other operating and non-operating income of Rs 82.1 crore and you have a quarter where the exports may have led the way, but the foundation as a whole was soft, with pressure felt in most of the key areas.
One-time tax item and implications
Natco Pharma has put a one-time figure of Rs 115 crore into the quarter and full-year net profit. It comes from the company’s decision to switch to the new tax rules come FY27 and revalue its deferred tax assets and liabilities, including MAT credit.
You won’t see that again. It makes the reported profit look better, but it also puts a fine line between what the business is really doing and the accounting. For any investor, the story in the EBITDA and the margins is what will drive valuation in the short run.
Why it matters and what to track
Going from 45 percent to 17.2 percent in a year is no small thing. It eats into your operating leverage and can put a lid on reinvestment if it holds. Since exports are the big tent pole, we’ll be watching for some steadiness there to set the tone for future earnings.
In the next few quarters, three things will stand out: how well they execute on formulation exports, any pickup in the domestic market, and a turn around in APIs. The revenue mix is something to keep an eye on, as it has a lot to do with where the blended margins and cash are going.
The market has already spoken, with the stock in double-digit territory for a good part of the day. If the shares are to find their footing, it will be on the strength of some margin and volume recovery, not on a one-off tax break.
