Mankind Pharma Stock Soars As Investec Assigns 'Buy', Sees 38% Upside

Mankind Pharma's stock was up more than 6% as brokerage firm Investec rated the company "Buy", setting a target price of Rs 3,300 per share, which implies a potential upside of 37.7%.

Investec attributes Mankind's strong market performance to its sales force of over 16,000 representatives and a portfolio of popular consumer brands, including Manforce and PregaNews. These brands have not only bolstered the company's reputation but have also contributed significantly to its market share, positioning Mankind as the second-largest player by volume in the Indian pharmaceuticals sector.

The acquisition of BSV is viewed as a pivotal move that aligns well with Mankind's vision of becoming an innovation-driven company focused on high-barrier specialty products. Investec believes BSV's strengths in research and development, particularly in women's health and in vitro fertilisation (IVF), will enhance Mankind's offerings in these critical areas. The IVF market alone is projected to reach $6 billion, presenting a significant opportunity for growth.

Investec forecasts 18% compound annual growth rate (CAGR) for earnings before interest, taxes, depreciation, and amortisation (Ebitda) from financial year 2024 to financial year 2027. It anticipates BSV's sales could reach $1 billion with a margin of over 35% by financial year 2032. This optimistic outlook is reinforced by Mankind's established presence and ability to scale its operations effectively.

Investec highlighted that the acquisition was made at a competitive valuation of five times sales and 18 times Ebitda, especially when compared to industry peers. This strategic purchase is expected to further add to Mankind’s ambitions in both domestic and international markets.

The scrip rose as much as 6.55% to Rs 2,585 apiece. However, it later pared gains to trade 6.35% higher at Rs 2,580.05 apiece, as of 09:43 a.m. This compares to a 0.52% advance in the NSE Nifty 50 index.

It has risen 51.06% in the last 12 months. Total traded volume so far in the day stood at 8.2 times its 30-day average. The relative strength index was at 66.

Out of 15 analysts tracking the company, 11 maintain a 'buy' rating, three recommend a 'hold,' and one suggests 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an downside of 5.3%.