Mankind Pharma shares rise as profits jump 29% in Q2 on strong sales recovery

Mankind Pharma, one of India’s largest pharmaceutical players, witnessed its shares surge by 6 per cent to a peak of Rs 2,882.75 on the BSE after announcing a robust 29 per cent year-on-year profit growth for the quarter ending September 2024.

This growth, driven by a significant recovery in sales volume, underscores the company’s strong market positioning and operational resilience.

Mankind reported a net profit of Rs 658.88 crore for Q2 FY24, up from Rs 511.18 crore in the same quarter last year.

Total revenue also saw a healthy increase, rising 13.6 per cent year-on-year to Rs 3,076.51 crore, compared to Rs 2,708.10 crore previously. This consistent revenue growth, complemented by improved operating efficiencies, has reinforced investor confidence.

According to Rajeev Juneja, Vice Chairman and Managing Director of Mankind Pharma, the company achieved “steady revenue growth of 13.6 per cent year-on-year with strong EBITDA margins of 27.7 per cent.” He attributed this success to the rebound in sales volumes, sustained outperformance in the chronic segment, and effective leverage of operating efficiencies.

Domestic and Export Performance

Mankind’s domestic sales in India rose by 11 per cent to reach Rs 2,796 crore, further highlighting its strong local market foothold. Meanwhile, exports showed remarkable growth, surging by 57 per cent to Rs 281 crore, a result of expanded business in existing markets and recent product launches over the past two years.

The company credits its export growth to “increased base business, bolstered by new launches in the last 12-24 months.” This expansion not only diversifies Mankind’s revenue streams but also enhances its competitive edge in the global pharmaceutical landscape.

Brokerage Views and Valuation Insights

Brokerages are optimistic about Mankind’s long-term trajectory. Domestic brokerage Motilal Oswal recently adjusted its target price to Rs 3,140, based on a valuation of 45x forward earnings for the next 12 months. Motilal Oswal cited factors such as the ongoing success of Mankind’s acquisition of BSV, a promising export growth outlook, and a gradual scale-up in the consumer healthcare segment. Adjusting for these factors, the brokerage sees Mankind as a compelling buy for investors looking to gain exposure to India’s rapidly expanding pharmaceutical sector.

Future Prospects and Growth Strategy

With a diversified portfolio covering key therapeutic areas and a significant focus on consumer healthcare, Mankind Pharma is well-positioned for continued growth. The company is leveraging its strengths in the chronic segment to drive profitability while exploring new markets and bolstering its R&D pipeline. 

Analysts expect Mankind’s continued expansion in chronic therapies, bolstered by consumer healthcare and export growth, to sustain its revenue momentum in the upcoming quarters. As Mankind continues to capitalise on market trends and improve operational efficiencies, its strategic initiatives seem likely to deliver consistent value for shareholders.