Shares of this pharmaceutical stock reached a 52-week high of Rs.2,649 per share following the announcement of plans to raise Rs.10,000 crore through the issuance of Non-Convertible Debentures and Commercial Papers.
Share Price Movement
In Monday’s trading session, shares of Mankind Pharma Limited reached a 52-week high of Rs.2,649 per share, marking a 4 percent increase from its previous close of Rs.2,547.15 apiece. Over the past year, the stock has provided returns exceeding 50 percent.
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What led to the rise
Drug firm Mankind Pharma Ltd announced that its board of directors approved a major fundraising initiative on 20th September. The company intends to raise Rs.10,000 crore through the private placement of non-convertible debentures (NCDs) and commercial papers (CPs).
To support this initiative, the board has established a Fund Raising Committee, which is authorized to take necessary actions, including finalizing the terms of issuance and the allotment of the NCDs and CPs.
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Recent Initiatives
In the first week of September, Mankind Pharma announced that it had finalized a business transfer agreement (BTA) to transfer its over-the-counter (OTC) business to its wholly-owned subsidiary, Mankind Consumer Products Private Limited (MCPPL), on a slump sale basis.
In this slump sale, which involves selling the business for a lump sum without specifying individual asset and liability values, MCPPL will take over the OTC business as a going concern.
Under the deal, Mankind Pharma will divest its OTC business to Mankind Consumer Products, subject to conditions in the BTA. This move aims to streamline operations and allow Mankind Pharma to focus on its core pharmaceutical business while enhancing the management of the OTC segment.
Target Recommendation
Investec, a prominent brokerage firm, has recommended a “Buy” call on Mankind Pharma Limited with a target price of Rs.3,300 per share, indicating an upside potential of 25 percent.
The brokerage highlighted that Mankind Pharma’s innovation-focused strategy aligns with Bharat Serums and Vaccines (BSV). It believes the market underestimates BSV’s unique advantages, projecting potential sales of $1 billion and over 35 percent EBITDA by FY32 under Mankind’s management, reflecting an improvement of over 1,000 basis points.
Financials
In its recent financial updates, Mankind Pharma reported revenue of Rs.2,893 crore in Q1FY25, marking a 12.2 percent growth from Rs.2,579 crore in Q1FY24. Similarly, the company’s net profit grew to Rs.543 crore from Rs.494 crore in the same period, reflecting a 10 percent increase.
Company Profile
Mankind Pharma is an Indian multinational pharmaceutical and healthcare product company, headquartered in Delhi. The company has products in therapeutic areas ranging from antibiotics to gastrointestinal, cardiovascular, dermal, and erectile dysfunction medications
Written by – Siddesh S Raskar
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