New Delhi, Sept. 1 -- Natco Pharma has built its business around a familiar playbook for years: cracking complex and difficult-to-make generics that can deliver outsized earnings if they succeed. But as competition intensifies and the growth in generics stalls, the Hyderabad-based company is looking beyond the US, its key market, to broaden its bets, both geographically and further up the value chain.

The mid-sized drugmaker, known for its aggressive patent challenge strategy for complex or specialty molecules, especially in the US generics market, has acquired a significant stake in South Africa's second largest drugmaker, and has raised investments in innovation.

"Globally, generics is consolidating," chief executive Rajeev Nannapanen...