Natco Pharma: A high-margin business or a volatility trap at 10x earnings?

What Happened

Natco Pharma presents a paradox: despite Rs 2,500 crore net cash, 30%+ EBITDA margins, and exposure to major pharma trends, it trades at 10x earnings. The company operates on a 'windows-based' model capturing value at peak commercial cycles rather than pursuing volume growth. Semaglutide launch and new US generics like pomalidomide have improved earnings visibility.

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