Mankind Pharma Q1 Results Review - Margins Impacted By One-Offs: Systematix

Systematix Research Report

Mankind Pharma Ltd.'s Q1 FY25 revenues were slightly below our estimates while Ebitda was below our and consensus estimates. Ebitda declined due to one-time M&A related expenses and other non-recurring costs. However, these costs are expected to normalize in the coming quarters which will lead to the margins stabilizing at ~25%.

Revenue growth stood at 12.2% YoY led by strong growth in Exports (U.S. sales) and continued growth momentum in the domestic market. Growth in India business was slightly below estimates (~10% YoY) due to a delayed season in anti-infectives and certain product withdrawals this quarter which shall normalize in Q2 FY25.

Consumer business grew 32.1% QoQ as the company witnessed faster growth across all channels. Exports business witnessed a 62% YoY growth driven by an increase in the base business and new launches during the quarter.

The acquisition of Bharat Serums and Vaccines Ltd. shall become EPS accretive from the second year onwards with Mankind expecting synergy benefits to be in the range of Rs. 5001,000 million over the next 12-24 months.

We recommend a Hold on Mankind at current market price with a revised target price of Rs 1,908 based on 27 times FY26E EPS.

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