Mankind Pharma chronic growth, acute recovery and BSV scale-up underpin earnings re-acceleration

Investment View and Valuation

Motilal Oswal Financial Services reiterated its Buy rating on Mankind Pharma following its July 31, 2026 results update. 1QFY27 revenue and EBITDA were broadly in line with expectations, while adjusted PAT missed estimates because of lower other income and a higher tax rate.

The broker expects earnings re-acceleration after two stable years, forecasting a 22 per cent earnings CAGR over FY26-28. The outlook is supported by sustained chronic-therapy momentum, recovery in acute therapies, a rising specialty-portfolio mix and improving traction in the BSV business.

MOFSL values Mankind Pharma at 40 times 12-month forward earnings and has a target price of Rs 2,975. It cut FY27 earnings estimates by 4 per cent because of muted Consumer Health performance.

1QFY27 Financial Performance

Gross margin expansion was driven by pricing, a better chronic-therapy mix and a favourable base. EBITDA margin expanded to 26.2 per cent, although it was below MOFSL’s 27.7 per cent estimate. Adjusted PAT was lower than expected because of lower other income and a higher tax rate.

Domestic Prescription Business and Therapy Mix

The domestic business, which represented 85 per cent of sales, grew 10.5 per cent year-on-year to Rs 3,430 crore. Prescription business accounted for 93 per cent of domestic sales and grew 11 per cent to Rs 3,180 crore, marking the second consecutive quarter of double-digit growth excluding Consumer Health.

Chronic therapies grew 15.8 per cent, while acute therapies increased 10.9 per cent. The chronic mix rose 80 basis points year-on-year to approximately 40 per cent of domestic sales. Cardiac and anti-diabetes therapies grew 19.4 per cent and 12.7 per cent, respectively.

Management stated that covered-market share in anti-diabetes had increased from 56 per cent to 74 per cent and aims to raise the chronic share to 50 per cent over the medium term. Mankind retained its number-one prescription rank for a ninth consecutive year, with a 15.2 per cent prescription share.

Acute Therapies, BSV and Specialty Portfolio

The acute portfolio recovered across gastro, VMN and gynaec therapies. Nurokind-LC, Cefakind-CV, Pantakind and Dydroboon outperformed their respective markets.

The BSV portfolio grew 21 per cent year-on-year, with domestic BSV revenue increasing 17 per cent and international BSV revenue rising 25 per cent. Women’s health and fertility brands Foligraf, Humog and Anti-D recorded growth of 39 per cent, 39 per cent and 23 per cent, respectively, according to IQVIA June 2026 data.

Consumer Health and International Expansion

Consumer Health was the weak area, growing only 3.9 per cent year-on-year to Rs 250 crore. Performance was affected by the discontinuation of discounted cash-and-carry sales and soft market conditions. Management expects channel rationalisation to normalise, supporting high single-digit to low-double-digit Consumer Health growth in FY27.

Modern trade and e-commerce grew approximately 38 per cent in 1QFY27 and represented about 15 per cent of Consumer Health sales, compared with 11 per cent previously.

Exports rose 29 per cent to Rs 600 crore, aided by product launches, favourable currency movements and BSV traction. Mankind Pharma excluding BSV launched one product in the US during the quarter, taking cumulative launches to 49. Management is pursuing deeper penetration in existing overseas markets, as well as new registrations and approvals in new geographies.

Guidance, Balance Sheet and Forecasts

Management reiterated its FY27 guidance for healthy double-digit prescription growth, high-teen BSV growth, gross margin of 71 per cent and EBITDA margin of 25.5-26.5 per cent.

• Net debt: Rs 3,400 crore, down Rs 500 crore sequentially.
• Finance cost: Rs 110 crore, compared with Rs 140 crore sequentially, following Rs 1,250 crore of debt repayment.
• FY28 domestic formulations forecast: Rs 14,400 crore.
• FY28 exports forecast: Rs 2,800 crore.
• FY28 Consumer Health forecast: Rs 1,060 crore.
• FY28 EBITDA margin forecast: 27.1 per cent.

Key Watch Items

• Recovery in Consumer Health growth following channel rationalisation.
• Sustained momentum in acute therapies.
• Integration and scale-up of the BSV portfolio.
• Progress on export launches and expansion into new geographies.
• Margin performance and delivery against FY27 guidance.
• Working-capital requirements and continued debt reduction.