Analysis: Natural Capsules Ltd.

Growth thesis

Natural Capsules manufactures gelatin and HPMC pharmaceutical capsules alongside APIs, targeting Rs. 274 crores in FY27 revenue. Key segments include gelatin capsules (Rs. 170 crores), HPMC capsules (Rs. 20 crores), domestic APIs (Rs. 70 crores), and Fermbox CMO (Rs. 14 crores). Growth hinges on HPMC qualification for US exports, API commercial scale-up with WHO/EU/USFDA accreditations, and Fermbox’s Rs. 60 crore equipment investment to expand CMO revenue to Rs. 50 crores over 2-3 years. Capsule margins are expected to improve to 13-18% through regulated market shifts, while API margins target 2-3% gross and 20% for Fermbox. Execution risks center on HPMC line viability amid US tariff uncertainties and API regulatory delays.

Why is Natural Capsules Ltd. stock rising?

• New HPMC line commissioned; revenue expected to commence in second half of FY27 subject to US customer qualification and approval.
• Targeting consolidated revenue of Rs.274 crores for FY27: Gelatin capsules Rs.170 crores, HPMC capsules Rs.20 crores, API domestic Rs.70 crores, Fermbox CMO Rs.14 crores.
• Expecting capsule EBITDA margins: HPMC at 18% and gelatin at 13% for FY27.
• API segment targeting WHO GMP, EU GMP, and USFDA accreditations in coming years to shift to higher-margin regulated markets.
• Seeking minimum import price imposition from government for Prednisolone and Dexamethasone under PLI scheme; commercial-scale demonstration targeted for Q2/Q3 FY27.

Research report

companyname: Natural Capsules Limited ticker: NATCAPSUQ sector: Pharmaceuticals Natural Capsules Limited manufactures capsule shells and steroidal active pharmaceutical ingredients from two facilities in Bangalore and Pondicherry. It started in 1993 as a capsule maker and gradually became the second-largest gelatin capsule manufacturer in India by volume. During FY25, capsules contributed approximately 99% of total revenue of ₹169.21 crore. The company also entered the API business through its ...

Catalysts

capex, margin expansion, regulatory approval, acquisition inorganic

Growth guidance

FY27 revenue guided at Rs. 274 crores (Rs. 170 crores from gelatin capsules, Rs. 20 crores from HPMC capsules, Rs. 70 crores from API, Rs. 14 crores from Fermbox CMO) driven by HPMC qualification, API commercial scale-up, and Fermbox collaboration