Just when the profits of years of perseverance have begun rolling into the bank for Natco Pharma, we minority investors are in a spot of bother due to twin negative news of legal action in US and the USFDA Form 483 with 8 observations during the Kothur plant inspection earlier in the month.
The legal action is of lesser concern to the company as it has a marketing partner in US who most likely has to bear the costs, and there are well established laws regarding patents in the country. However, Kothur plant is only one of the 2 USFDA approved manufacturing plants for Natco and this plant is capable of manufacturing cytotoxic orals and injectibles. It is imperative for the company to get a clean chit in the follow up from the USFDA. The Kothur plant is their older USFDA approved one and has been subject to audits from last many years.
Meanwhile the share price has taken a beating after the most impressive quarterly performance in the companys history.
In the long run price is a slave to earnings. Whileone is looking forward to the stellar Q2 numbers as guided by the mgmt in the post Q1 concall, here is hoping that more light is shed in the post Q2 concall by the management which would go a long way in calming nerves.
By the time Q4 results get declared Natco is anticipating a net profit of +1000 crores (management guidance) and this has a 50% probability of being bettered in the following year.
So maybe its best that I uninstall the trading app for the next 7 months 
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