Natco Pharma's 1QFY16 performance has been in-line on the operating and profitability front despite a 5% miss in top-line impacted by dismal export formulations and lumpy API sales. Surge in gross margins at 67.6% (up 200bps yoy) led to steady improvement in EBITDA at 22.9% (up 290 bps yoy). Traction in base portfolio of domestic oncology and gSovaldi (Rs370mn in 1Q) were key highlights. Management has guided for sales of Rs10.5-11bn and PAT of Rs1.6bn in FY16E assuming: 1) Sovaldi ramp up in India-guided Rs1.5bn sales 2) Commencement of Venezuela tender business 3) No commercial launches in US. However, the...