India’s pharmaceutical industry is a cornerstone of the global healthcare market, underpinned by its vast population and skilled workforce. As the world’s largest provider of generic medicines, India supplies over 50% of global vaccine demand and meets 40% of generic drug needs in the U.S. The country aims to become the world’s pharmaceutical hub, supported by strong infrastructure and government initiatives like the Production Linked Incentive (PLI) Scheme.
India is also a leader in Contract Development and Manufacturing Organizations (CDMOs), with companies like Divi’s Laboratories and Syngene International at the forefront. With increasing demand for affordable healthcare solutions globally and innovation in biologics and biosimilars, India’s pharmaceutical sector has immense growth potential in the coming years.
Share Price
The shares of Mankind Pharma closed at Rs. 2,586.45 down by 1.11% from its previous close of Rs. 2,615 as of December 6, 2024.
Financial Highlights
The key metrics show, the company’s Revenue from Operations increased by 13.6% YoY, from INR 2,708 crore in Q2FY24 to INR 3,077 crore in Q2FY25. This growth was primarily driven by the Domestic Business segment, which saw a 10.5% YoY increase, rising from INR 2,529 crore to INR 2,796 crore.
The company’s profitability also improved, with Gross Profit increasing by 16.9% YoY from 1,883 crore to 2,202 crore and EBITDA growing by 24.3% YoY from 686 crore to 853 crore. The Profit After Tax (PAT) saw a significant jump of 28.9%, from INR 511 crore in Q2FY24 to INR 659 crore in Q2FY25. The Diluted EPS and Cash EPS also witnessed robust YoY growth of 30.4% and 26.9%, rising from 12.5 to 16.3 rupees respectively.
Margin Improvements
The company’s operational efficiency is reflected in the expansion of its margins. The Gross Margins improved by 210 basis points (bps) YoY, while the EBITDA Margins and Adjusted EBITDA Margins both increased by 240 bps. The PAT Margins also expanded by 250 bps, showcasing the company’s ability to effectively manage its costs and drive profitability. .
Business Highlights Growth and Challenges Faced
The highlights of the domestic business performance are the strong growth in revenue, with a 13% year-over-year (YoY) increase in FY24 and an 11% YoY growth in Q2FY25. This growth was supported by secondary sales growth of 8.6% vs. 8.0% IPM (Indian Pharmacy Market) growth and strong outperformance of 3.4x volume growth to IPM.
However, the growth was partially impacted by regulatory headwinds in certain key products in the acute segment and certain initiatives adopted to enhance field force efficiency.
Despite these challenges, the company has consistently maintained the #1 rank over the last 7 years, with a prescription share of 15.4% in Q2FY25, and increased its prescriber penetration to 83.5% in Q2FY25 from 83.2% in Q2FY24.
Top Brands Owned
Manforce dominates the condom market in India with a 28% share. Prega News leads the pregnancy test kit segment, holding an impressive 83% market share. Gas-O-Fast is the second most popular antacid powder, capturing 9% of the market. HealthOK ranks eighth in the vitamins, minerals, and nutrients category, commanding a 3% share. AcneStar is the top brand in the medicated anti-acne segment with a 36% share, while UNWANTED-72 secures its position as the leading emergency contraceptive brand, holding 54% of the market.
Growth and Expansion Strategy
The company has outlined a comprehensive growth and expansion strategy for the coming years. A key focus area is increasing the value of prescriptions in existing markets by expanding market coverage, with a historic increase in CVM (Coverage, Volumes, and Mix) from 62% in FY21 to 69% in FY24.
The company also aims to increase its share in the chronic segment by growing its presence in existing therapies and expanding into new therapies like CNS, Transplant, and Urology. Additionally, the company is looking to increase its penetration in Tier I cities by engaging with key opinion leaders, hospital tie-ups, and specialty division launches.
Alongside these market-focused initiatives, the company is also pursuing inorganic growth through M&A and in-licensing, with a focus on high-entry barrier markets in the chronic and consumer healthcare segments.
The company is also building alternative channels of growth, including modern trade and other contemporary trade channels while continuing to develop digital platforms to enhance doctor engagement and drive business transformation.
Conclusion
Mankind Pharma has demonstrated strong financial performance, driven by robust growth in its domestic business. The company’s comprehensive growth strategy, focusing on expanding market coverage, increasing chronic segment presence, and leveraging digital platforms, positions it well to capitalize on the burgeoning opportunities in the Indian pharmaceutical market. With a leading market share across multiple product categories and a focus on operational efficiency, Mankind Pharma is poised to maintain its competitive edge and drive continued success in the years ahead.
Written By: Dipangshu Kundu
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