01 — At a Glance
The Swiss Import Drug Company That’s Bleeding Rupees
- 52-Week High / Low₹1,100 / ₹748
- Dec 2025 Revenue₹86 Cr
- Dec 2025 PAT₹16.1 Cr
- TTM EPS₹39.4
- 5-Year Profit CAGR+58.5%
- Book Value / Share₹314
- Price to Book2.93x
- 5-Year Sales CAGR-4.06%
- Promoter Holding70.68%
- Return (3-months)+19.3%
The Tea: Novartis India just reported Q3 PAT of ₹16.1 crore, down a brutal 36.8% YoY. Sales are down 7.63%. The stock somehow returned 19.3% in 3 months anyway — because three financial buyers (ChrysCapital, WaveRise, Two Infinity) agreed on Feb 19 to buy 70.68% from Novartis AG at ₹860.64 per share and launch an open offer for the remaining 26%. The company has bled revenue for 5 years straight (-4% CAGR). But its profit has somehow grown 58.5% in 5 years. That’s not a business story. That’s creative accounting theatre.
02 — Introduction
The Drug Company That Forgot to Sell Drugs
Novartis India is what happens when a large Swiss pharmaceutical company (Novartis AG, ₹45.4 billion revenue annually) imports medicines to India and lets them sit on shelves. The company imports pain management drugs (Voveran), transplant immunology products (Simulect, Certican, Sandimmun), and neuroscience medications (Tegretol, Exelon). Sounds impressive until you check the sales chart — it’s been downhill since 2014.
In FY25, Novartis India generated ₹356 crores in revenue — down from ₹379 crores in FY24, ₹400 crores in FY23, and ₹859 crores in FY14. That’s an 11-year collapse of 58%. The company once had 1,207 employees (FY15). Today it has 56. The distribution network had 21,000 dealers. Now you cannot find the exact number because they stopped reporting it. Translation: the business is slowly disappearing from India.
Yet somehow, earnings have grown. In fact, profit growth over 5 years is +58.5% CAGR. How? Other income. Lots and lots of other income. Interest on fixed deposits, tax refunds, and creative accounting. The company’s PAT in FY25 was ₹101 crore. But operating profit was only ₹91 crore. Other income was ₹42 crore. Without “other income,” this company would be mid-table, not headline-making. And then, in December 2025, three funds decided this dying import house was worth ₹860.64 per share. The math is broken. Or the buyers are very smart. We’re betting on the former.
The Wait, What? Moment: MD Sanjay Murdeshwar resigned in January 2024. The company received communication from Novartis AG in February 2024 that they wanted to “unlock shareholder value.” Unlock is corporate-speak for “we’re tired of this loss-making arm and want to sell it.” By February 2026, Novartis AG had indeed sold 70.68% to ChrysCapital, WaveRise, and Two Infinity. The remaining 26% is being acquired via mandatory open offer at ₹860.64. The tendering period is April 21 – May 5, 2026. Essentially, the Swiss HQ got tired of managing an Indian drug company that was literally firing employees every year and decided to hand it over to financial buyers. Plot twist: financial buyers usually know how to cut costs. This might actually work.
03 — Business Model: The Slow-Motion Crash
Sell Imported Drugs. Collect Interest. Pray.
Novartis India buys medicines from its Swiss parent, marks them up, and sells them through a distribution network to hospitals, clinics, and pharmacies. In FY24, traded goods were 99% of revenue and “others” were 1%. This is a simple pass-through import-export model with zero innovation, zero R&D, and zero competitive moat. The parent company (Novartis AG) provides technology support. Novartis India pays royalty for the privilege — ₹2.5 crore in FY24 versus ₹3.3 crore in FY22. Not much, but on declining revenues, every rupee matters.
The company operates development hubs in Hyderabad and Mumbai with 350+ scientists on staff. But look closer: these centers do “development of breakthrough medicines” — not for India, for the global parent company. India is essentially a cost center for Swiss R&D. The actual drug sales in India are declining. In 2019, the government revised the National List of Essential Medicines and removed nine of Novartis India’s brands from covered categories. Oncology and neurology products were hit hard. The company entered an exclusive distribution deal with Dr. Reddy’s in FY22 — essentially outsourcing sales. Translation: we can’t sell our own drugs anymore. Maybe you can.
Sales Decline (5yr)-58%₹859 Cr → ₹356 Cr
Employee Count (10yr)-95%1,207 → 56
Profit Margin (TTM)28.0%OPM: Inflated
Other Income / PAT40%FY25 mix
The darkest part of this story: the Voveran brand (pain management) once made this company household inventory in Indian medicine cabinets. Today, Novartis India no longer even sells it directly — they handed the rights to Dr. Reddy’s. It’s like watching a restaurant franchise lose the ability to cook its own signature dish. You didn’t lose the recipe. You lost the customer faith.
04 — Financials Overview
The Quarterly Demolition: Down 36.8% YoY
Result type: Quarterly Results | Q3 FY26 EPS: ₹6.52 | Annualised EPS (Q1-Q3 Avg): (₹11.87+₹9.81+₹6.52)/3 × 4 = ₹38.13
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 86 | 93 | 90 | -7.63% | -4.44% |
| Operating Profit | 22 | 26 | 24 | -15.4% | -8.33% |
| Operating Margin % | 26% | 28% | 26% | -200 bps | 0 bps |
| PAT | 16.1 | 25 | 24 | -36.8% | -32.9% |
| EPS (₹) | 6.52 | 10.31 | 9.81 | -36.8% | -33.5% |
The Massacre: Q3 revenue of ₹86 crore is down 7.6% YoY and 4.4% QoQ. Not terrible. But then operating profit fell 15.4% YoY. PAT collapsed 36.8% YoY. EPS went from ₹10.31 to ₹6.52. This is not a growth company with margin compression. This is a shrinking company with accelerating decline. The P/E of 23.3x is pricing in zero growth, which is optimistic given the trajectory.
💬 If a company’s sales decline 58% over 11 years, employees drop 95%, and Q3 profit is down 36.8% YoY, why is the P/E 23.3x? Is the open offer creating a speculative bid, or is something deeper being repriced? Drop your hot take below.
05 — Valuation: The Open Offer Price vs Reality
₹860.64 Is The Offer. But Is It Fair?
