Mankind Pharma scales new high; rallies 11% in 3 days post Q4 earnings beat

Shares of Mankind Pharma rallied 8 per cent to hit a new high of Rs 1,509 on the BSE in Friday’s intra-day trade. With this, the stock of the pharmaceutical company — popular for its Manforce brand of condoms and Prega News pregnancy test kit – surpassed its previous high of Rs 1,439, touched on May 12, 2023.

Mankind Pharma made its stock market debut on May 9, 2023. Currently, the stock was quoting 40 per cent higher over its issue price of Rs 1,080. The trading volumes on the counter jumped over four-fold today. A combined 1.3 million shares changed hands on the NSE and BSE, till 12:54 pm. In comparison, the S&P BSE Sensex was up 0.23 per cent at 62,575.

In the past three days, the stock has surged 11 per cent after the company reported a better-than-expected 52 per cent year-on-year (YoY) increase in consolidated profit after tax (PAT) at Rs 294 crore for the March quarter (Q4FY23), aided by robust sales. Revenue from operations rose 18.9 per cent YoY to Rs 2,053 crore from Rs 1,726 crore in the year-ago period.

Mankind Pharma said its domestic business continued to outperform the Indian pharma market (IPM) in FY23, led by growth in chronic segments whose share has increased to 34 per cent from 33 per cent in FY22.  

The consumer healthcare business has maintained its double digit growth with dominant brand leadership in its categories. The company’s focus is on increasing value of prescription within existing class II-IV and rural markets and increasing penetration in metros through higher chronic presence, the management said.

“Mankind reported its first quarterly earnings post-listing and it was ahead of our estimates. We expect steady double-digit growth momentum over FY23-26 on the back of continued growth outperformance vs IPM,” analysts at BNP Paribas India said.

The brokerage expects outperformance in the domestic market to continue with an increasing contribution of chronic products. “We expect revenue/EBITDA/PAT CAGR of 12.6/18.5/21.9 per cent over FY23-26E. We factor in higher India sales and raise our FY24/25 earnings by 2-3 per cent,” it said in a result update.

It maintained a BUY rating on the stock with a revised target price of Rs 1,520 (Rs 1,500 previously), based on 30x (unchanged) FY25E earnings.