Stock of this pharma company has nearly doubled against its issue price

Mankind hit record high of Rs 2,132.10, rallied 8% in intra-day trade and zoomed 97% against its issue price of Rs 1,080 per share.

Shares of Mankind Pharma (Mankind) hit a new high of Rs 2,132.10, as they rallied 8 per cent on the BSE in Tuesday’s in intra-day trade amid a strong up move seen in the pharmaceutical stocks, despite weakness in the broader market. Currently, the stock of pharmaceutical company has nearly doubled or zoomed 97 per cent as against its issue price of Rs 1,080 per share.

Mankind surpassed its previous high of Rs 2,039.95 recorded on November 21, 2023. It was quoting at its highest level since its listing on May 9, 2023. In comparison, the S&P BSE Sensex was down 0.73 per cent at 71,748 at 01:13 PM.

Mankind is the fourth largest player in the domestic market with a presence across therapy areas like anti-infectives, cardiac, gastro, respiratory and also in consumer healthcare segments like condoms, acne preparations, emergency contraceptives, pregnancy tests among others. The company sells the Manforce brand of condoms, which has a 30 per cent market share, while its pregnancy test kit Prega News commands 80 per cent of the market.

Mankind is domestic focused with domestic revenues contributing to 97 per cent of the total revenue from operations in the financial year 2022-23 (FY23). Approximately 14 per cent of the domestic sales of the company was attributed to the sales from price control products, which is one of the lowest in the industry.

Meanwhile, for the first half  (April to September) of FY24 (H1FY24), Mankind posted 40 per cent year-on-year (YoY) jump in profit after tax at Rs 1,005 crore, on back of healthy operational performance. Revenue grew 15 per cent YoY at Rs 5,287 crore. The growth was driven by new product launches and expanding presence in Metro & Tier I cities.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) margins improved 260 bps to 25.5 per cent in H1FY24 from 22.9 per cent in H1FY23. The company expects EBITDA margins in the range of 24 per cent to 26 per cent  for the financial year FY24.

While the Pharma segment has grown at par with Indian Pharmaceutical Market (IPM) (vs outperformance earlier) – due to delayed acute season, the management expects to outperform IPM given strong chronic growth and uptick in season. Focus to increase chronic share led to outperformance of 1.4x versus IPM Chronic growth in H1FY2, the management had said.

IPM has experienced remarkable growth over the years, reflecting its immense potential. From Rs 66,053 crore in FY12, the IPM reached Rs 1.86 trillion in FY22, demonstrating a robust CAGR of approximately 10.9 per cent. In the next few years, the market is expected to maintain its upward momentum and is projected to grow at a CAGR of 10-11 per cent and reach a value of Rs 3-3.1 trillion by FY27.

Several key factors have contributed to the substantial growth of the IPM. The rise in disposable income has led to improved living standards and greater healthcare awareness, prompting individuals across various income segments to seek high-quality healthcare services, including better hospitals, medicines and pharmacy offerings, Mankind said in its FY23 annual report.

The company’s strategic expansion in chronic therapeutic areas led to higher growth rates compared to the IPM. Domestic sales from chronic therapeutic areas have steadily increased from approximately 28 per cent in FY18 to approximately 34 per cent in FY23.

The company is one of the fastest growing companies among the 10 largest corporates in the IPM. It's volume growth has been 2.2X the average volume growth of the IPM in FY18-23. This success is attributed to affordability of its medicines, expansive distribution network, large field force, and strong presence among doctors, making the company one of the industry leaders.