MANKIND - Mankind Pharma Limited Share Price

Mankind Pharma's management provided a robust outlook for Q1 FY'26, reporting a significant revenue increase of 25% year-on-year to Rs. 3,570 crores, with an EBITDA margin of 23.8%. The domestic revenue grew by 19%, driven by volume recovery and strong performance in chronic therapies. Key highlights include:

1. Market Positioning: Mankind consolidated its position as the 4th largest player in the market by value with a 4.9% market share, up by 10 bps quarter-on-quarter. The company achieved 1.8x volume growth relative to the Indian Pharmaceutical Market (IPM), notably in anti-infectives and respiratory segments.

2. Chronic Therapy Growth: The chronic segment's market share (excluding BSV) increased by 190 bps to 38.8%. Key chronic therapy brands exhibited performance exceeding market growth, with cardiology at 1.5x and anti-diabetes at 1.6x.

3. Consumer Health Performance: OTC revenue rose by 15% to Rs. 237 crores. Notable brand growth included Gas-O-Fast at 36%, Manforce condoms at 18%, and Preganews at 12%. The modern trade and e-commerce channel grew by 50%, elevating its share to 11%.

4. R&D Initiatives: The management highlighted an enhanced focus on R&D, with ongoing projects including GPR-119 for obesity and diabetes, alongside a pipeline targeting autoimmune diseases and a recombinant biosimilar in the IVF space.

5. Financial Guidance: Management maintained its EBITDA guidance of 25% to 26% for the year, despite facing a 130 bps reduction in gross margins attributed to inventory adjustments.

6. BSV Integration and Growth: BSV is expected to contribute to overall growth with projected sales growth in the range of 18%-20% for FY26, supported by international market penetration and existing product registrations.

7. Dividend Announcement: The Board approved an interim dividend of Rs. 1 per share in celebration of the company's 30th anniversary.

Overall, Mankind Pharma is positioning itself for solid performance through strategic integrations, market share growth, and a focused R&D approach to drive long-term profitability.

Key Questions and Answers from Mankind Pharma Q1 FY26 Earnings Call

1. Question: What is the Capex and timeline for the Ambernath biosimilar facility?

   • Answer: For the Ambernath facility, the Phase 1 Capex is projected to be around Rs. 150 to Rs. 200 crores, with completion expected by the end of next calendar year. In FY26, we anticipate close to Rs. 100 crores in cash outflow for this facility.

2. Question: What are your expectations for interest costs in FY26?

   • Answer: We have scheduled Rs. 2,000 crores for debt repayment in FY26, with Rs. 500 crores repaid in Q1. We aim to pay the remaining Rs. 1,500 crores by October 2025, with expected total interest costs around Rs. 450 to Rs. 475 crores.

3. Question: Can you quantify the inventory write-off impact on gross margin?

   • Answer: It's difficult to provide a specific number as the decline in gross margin is due to a mix of factors, including inventory-related accruals. Nevertheless, we maintain our guidance for gross margins to remain above 70% and our EBITDA guidance of 25% to 26% for the year.

4. Question: What is the capacity utilization at the Dydrogesterone facility and future plans?

   • Answer: The capacity utilization is currently around 60%. We expect approvals for international markets by year-end, which should help in increasing this utilization. We're also transitioning to in-house production of KSM within two months.

5. Question: Can you provide growth metrics for the Panacea portfolio?

   • Answer: The Panacea portfolio is currently growing at over 25% year-on-year. This growth is consistent with our previous commentary, and we expect this trend to continue as the product gain traction in the market.

6. Question: How are you addressing the decline in Gynae growth?

   • Answer: Yes, we acknowledge some slowdown in Gynae, particularly with Dydrogesterone. However, we see a positive trend with recovery in recent quarters, expecting that Gynae will continue to perform well moving forward.

7. Question: What is your guidance for BSV's growth for FY26?

   • Answer: We maintain our guidance for BSV with expected sales growth of 18% to 20% and EBITDA margins of around 26% to 28%. The growth will be supported by both domestic and international markets.

8. Question: What are the future EBITDA margins for the consumer healthcare business?

   • Answer: While there has been a decline in EBITDA margins of 2%, we project that margins will stabilize and improve. We prioritize topline growth and expect to return to 20% margins in the coming quarters.

9. Question: Can we expect further increases in the sales force this fiscal year?

   • Answer: Currently, there's no plan to add more medical representatives. Our focus is on improving the productivity of our existing sales force in FY26.

10. Question: How sustainable is the OCF-to-EBITDA ratio in the long run?

    • Answer: While we observed a significant spike to 99% this quarter due to one-off realizations, maintaining around 80% in the long term is a more realistic estimate.