The share price of this large-cap pharma company saw its share rise by 4.5 percent to an intraday high of Rs 2,242 apiece from the previous close, after the company announced the acquisition of Bharat Serums and Vaccines Limited for an enterprise value of Rs 13,630 crores.
What Happened: According to the stock exchange filings published by Mankind Pharma Limited, the board of directors has approved the acquisition of a 100 percent stake in Bharat Serums and Vaccines Limited (BSV), equivalent to 73,086 equity shares, for an enterprise value of approximately Rs 13,630 crores with the transaction expecting to close within 3-4 months.
BSV Limited is involved in the business of research, development, licensing, manufacturing, importing, exporting, marketing, and distribution of active pharmaceutical ingredients (APIs), biotech and biological formulations, food and health supplements, medical devices, ayurvedic medicines, etc. The turnover of BSV Limited for the period 2023-2024 stood at Rs 1,723.47 crores.
The latest investor presentation of Mankind limited also mentions that the enterprise value of Rs 13,630 crores is equivalent to 22 to 23 times the projected EBITDA of Mankind limited for FY25. This helps assess whether the acquisition price is reasonable compared to the company’s expected earnings.
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Despite this positive news, the shares of Mankind Pharma Limited tumbled around 3 percent, trading at Rs 2,069 apiece at 11:42 am on Friday. The shares of this firm generated a return of 13 percent over the past 1 year and a return of 48 percent over the past 5 years. The market capitalization of Mankind limited stood at Rs 82,913 crores.
Financials: Analyzing the financials of Mankind Pharma Limited on a yearly basis, the sales generated by the firm climbed by 14 percent from Rs 8,127 crores in FY23 to Rs 9,265 crores in FY24. The net profits made by the firm also saw a rise of 46 percent from Rs 1,248 crores to Rs 1,823 crores during the same period.
EBITDA: The EBITDA of the proforma company, which is the combination of Mankind Pharma Limited and BSV Limited as of July 2024, stood at Rs 3,039 crores.
Acquisition Synergies: With the acquisition of BSV Limited, Mankind Pharma will benefit from various synergies, including BSV’s high entry barrier portfolio, a new R&D specialty tech platform, and a complementary range of products and services. This integration is expected to help Mankind Pharma reduce its net debt/EBITDA ratio by 2 times by the period ending FY26.
Ratios: Mankind Pharma Limited has reported a return on equity and a return on capital employed of 20.43 percent and 25 percent, respectively for the year 2024. The net profit margin stands at 19 percent during the same year.
Revenue Mix: As of July 2024, 8 percent of the revenues generated by Mankind Pharma Limited were derived from the international market, and the rest 92 percent from the domestic market.
Future Plans: Mankind Pharma Limited plans to expand in an available land parcel in the Genome Valley of Hyderabad.
Shareholding Pattern: As of June 2024, the shareholding of Mankind Pharma is as follows: 74.87 percent is owned by the promoters, 9.94 percent by domestic institutional investors (DII), and 11.58 percent by foreign institutional investors (FII). Among the DIIs, the SBI Large & Midcap Fund holds a 1.50 percent stake.
About the Company: Incorporated in 1995, Mankind Pharma Limited develops, manufactures, and markets pharmaceutical formulations in various acute and chronic therapeutic areas and several consumer healthcare products. Its product portfolio includes brands such as Nurokind, Telmikind, Manforce (Rx), Gudcef, Moxikind, Amlokind, Glimestar, Asthakind, Codistar, Candiforce, Mahacef, Dydroboon, Cefakind, Zenflox, Monticope, Dynaglipt, and others.
Written By Zahal
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