Last Thursday, Krka welcomed investors to its headquarters in Novo Mesto, home to the Group’s most technologically sophisticated production facility. Just before the event, the company released its 9M results, reporting solid gains across both revenue and profit. In this text, we will walk through the key takeaways from that day, covering the company overview, financial performance, strategic direction, R&D insights, and the outlook presented to investors.
For most of our investors, Krka is already a well-known name, and for those less familiar, it certainly should be. Krka is a Slovenian pharmaceutical group with a history dating back to 1954, and over the past seven decades, it has grown into one of the largest generic drug producers in Central and Eastern Europe. Today, the company operates across more than 70 markets, supported by a diversified international manufacturing footprint that includes facilities in Slovenia, Russia, Poland, Germany, Croatia, with a Joint Ventures China and India. The Group employs roughly 13,000 people, with more than half based outside Slovenia. Krka’s market capitalization is around EUR 6.7bn, placing it among the most significant and stable listed companies in the region. Their product range spans over 1,000 pharmaceutical products across various dosage forms made from 250 different APIs, with a strategic focus on high-quality, value-added generics.
Over the past year, Krka has gained roughly 49.5%, while the SBITOP index delivered around 50%. Krka now represents about 28% of the benchmark, which underlines how much its performance drives the overall direction of the Slovenian equity market. Over the past few years, this has been one of the best-performing stock indices globally, with Krka standing out as one of the key leaders behind that momentum. Investors can gain exposure to the entire index through InterCapital’s ICSLO ETF, which fully replicates SBITOP.
Krka Stock Price Development (13 Nov 2024 – 13 Nov 2025)
Source: LJSE, InterCapital Research
Onto the financials, the first part of the presentation, led by a member of the management board, David Bratož. Krka reported EUR 1.54bn of revenue in the first nine months, which is 7% YoY growth. The reasons behind that are that sales volume increased by 5% year on year, with a higher average price achieved. In parallel, operating expenses rose 6%, with selling and distribution expenses leading the group, thus giving margins space and helping with expense structure, and they are stable and good, with this having margins stable with OPEX in % of revenue falling by 0.7 p.p., giving a boost for margins. EBITDA margin is standing at 28.5% which Is 0.5 p.p. better the same period last year, but still lagging with 2023 9M of EBITDA margin of 29.7%. EBIT margin is at 23.9% which is 0.7 p.p. better than last year, and in line with the 2023 period. But when talking about net profit, it now stands at EUR 323.7m, with 15% upside YoY when it was at EUR 281M, and after EUR 236m in 2023. The rise of 15% is mainly because of financial income, which was up 129% YoY to EUR 47m from EUR 20.5m, mainly because of a really positive FX impact regarding the Russian rouble. Net profit margin is currently at 21.1%, rising from 2023 17.6% and 2024 19.6%. With ROE and ROA both also going linear in the same period up, ROE at 19% and ROA at 14.8%.
Looking at the geographic breakdown, Krka once again showed that its growth is anchored in the same core regions where it has held strong positions for decades. East Europe remains the largest market with EUR 534m in sales, up 10% YoY and accounting for 34.9% of total revenue, followed by Central Europe at EUR 351m and West Europe at EUR 273m. South East Europe also grew 8% YoY to EUR 218m, while Slovenia contributed EUR 99m. The only region with a minor decline was Overseas Markets, down 3%, which is fully aligned with Krka’s strategy. The company made it clear that they do not intend to pursue aggressive expansion into new geographies, especially not the United States, where regulatory and pricing barriers make entry unattractive. Instead, Krka plans to deepen its presence and capture better positions in its existing European and CIS markets, where it already benefits from strong brand recognition, established distribution networks, and a favourable mix of prescription and combination medicines.
With all this in mind, David also walked us through their investment plans, which did not fully go as intended this year due to bureaucratic delays. Investments currently stand at EUR 66.7m and are expected to close the year at around EUR 95m, including an additional EUR 5m directed to their Indian JV, where Krka holds 51% ownership. The JV will primarily support production for international markets rather than India itself, and we believe that most of this output will eventually be shipped back to Europe. For 2026, the company plans around EUR 140m of investments, largely focused on expanding and modernizing production facilities and infrastructure, which is EUR 45m higher than the level allocated for 2025. Within that, EUR 20m is earmarked for further development of the Indian JV. While the rest is earmarked for further extension of capacity by installing additional equipment in their existing location, primarily Notol 2 in Novo Mesto, Bršljin Department in Novo Mesto, Ljutomer, Slovenia, and Jastrebarsko, Croatia. Krka also in 2025 purchased a plot in Novo Mesto, which will be extended with additional capacity in the future. The company aims to spend in the 2026E to 2030E period EUR 750m, which is app. EUR 150m annually.
Krka Key Financials (9M 2023 – 9M 2025, EURm, %)
Source: Krka, InterCapital Research
As for the broader outlook, Krka expects a strong finish to 2025. Full-year sales are projected at EUR 2,020m, up 6% YoY, with 94% of revenue stemming from international markets. East Europe is set to remain the key sales engine, followed by Central and Western Europe, while prescription pharmaceuticals should continue to dominate the product mix with an 83% share of total revenue. Net profit for 2025 is estimated at EUR 383m, an 8% YoY increase, supported by stable margins and a favorable financial result. Investments should end just below EUR 95m, and headcount is expected to reach 13,344 employees by year’s end, with 41% located outside Slovenia.
Moving into 2026, the Group projects another 6% growth, with sales reaching EUR 2,132m and the export share again at 94%. Prescription pharmaceuticals are expected to remain above 80% of revenue, while net profit is forecast at EUR 405m, up 6% YoY. Planned investments exceed EUR 140m, consistent with the company’s multi-year push to expand and modernize production capacity, including EUR 20m dedicated to the Indian JV. The workforce is projected to grow by a further 2%. These plans align with the 2026 to 2030 strategic framework, though management highlighted sensitivity to price pressure, raw material costs, FX volatility, and changes in demand dynamics across key markets.
One of the presenters was Krka’s Chief R&D Officer, who walked us through the scientific backbone of their business and reminded us that pharmaceuticals operate on a long innovation cycle. Intensive R&D happens years before a product reaches the market, meaning that current sales are essentially the result of past scientific work, while future growth depends entirely on maintaining strong internal research, regulatory expertise, and high-quality talent. In the first nine months of 2025, Krka added seventeen new products to its portfolio: thirteen prescription medicines, two non-prescription products, and two animal health treatments. They also finalized more than 790 registration procedures and secured over 16,000 regulatory approvals for product variations, which is necessary to ensure uninterrupted supply across numerous tightly regulated markets.
Krka Profitability Development ( 9M 2023 – 9M 2025, %)
Source: Krka, InterCapital Research
From their R&D conclusions slide, Krka emphasized that their competitive advantage lies in high-quality generics built on strong safety, efficacy and bioequivalence standards, supported by continuous innovation in drug combinations, analytical methods, and formulation technologies. They also highlighted that more than a quarter of their internal resources are dedicated to supporting the entire product’s lifecycle, from optimization to compliance.
A key part of the presentation focused on combined medicines (Single Pill Combinations – SPCs). The chart showed a clear trend: although combination drugs represent a smaller share of total volumes, their share of sales value has been steadily rising for a decade. In the first half of 2025 SPCs already reached 34.7% of sales. This shift signals that combination therapies are becoming increasingly important commercially, offering higher value-added and more resilient pricing than mono products. Krka expects this segment to continue growing as treatment guidelines move toward multi-mechanism therapies.
They also pointed out that future R&D focus across the industry will inevitably shift toward obesity and endocrinology-related diseases, as these represent the largest structural healthcare challenge of the coming decades. Krka confirmed that they are deepening development efforts in these therapeutic areas while expanding their established segments.
Krka’s 2030 plan shows guidance for the growth of sales of 5% p.a. After carefully considering their business proposition and products that may appear on the market in the following years, we deem this estimate to be on the conservative side. So we decided to raise our 5-year CAGR top-line from 6.3% to 6.8% for the 2025E – 2030E period. Krka’s key therapeutic areas are poised for growth of mid to high single digits, while Krka is successful in inserting SPCs products on its respective markets, which will also give a boost to average price growth. Therefore, the future is bright for Krka investors.