Mankind Pharma Reports Mixed Q3 Results with 9.5% Profit Growth
Mankind Pharma Limited announced its financial results for the third quarter ended December, revealing a 9.5% year-on-year increase in net profit to ₹414 crore. This figure, however, fell short of market expectations, as the company navigated the integration of its recent acquisition, Bharat Serums and Vaccines Ltd (BSV).
Financial Performance Details
The pharmaceutical giant reported that its profit rose from ₹378 crore in the same quarter last year to ₹414 crore in Q3. On a sequential basis, profit declined by 20.4%, indicating some quarterly volatility. Revenue showed stronger growth, climbing to ₹3,567 crore, supported by robust domestic performance and the consolidation of BSV's operations.
A Bloomberg survey of 10 brokerages had projected a higher net profit of ₹507 crore and revenue of ₹3,607 crore, highlighting the earnings miss. The company's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) remained nearly unchanged at ₹816 crore compared to the previous year. However, the adjusted EBITDA margin contracted by 170 basis points to 25.9%, reflecting integration costs and operational adjustments.
Strategic Acquisition and Growth Pillars
In October 2024, Mankind Pharma completed the acquisition of a 100% stake in BSV for ₹13,768 crore. This strategic move has provided the company with entry into super-specialty, high-entry-barrier segments such as women's health, fertility, and critical care. Rajeev Juneja, Vice Chairman and Managing Director, stated, "BSV growth initiatives are progressing well, with strong double-digit growth in Q3."
Juneja further emphasized the company's confidence in delivering long-term sustainable growth, anchored by four key pillars:
- Steady base business
- Fast-growing specialty chronic portfolio
- High-potential over-the-counter (OTC) business
- Super specialty BSV portfolio
Domestic Business and Chronic Drug Focus
Mankind Pharma's domestic branded drugs business, which constitutes the majority of its sales, expanded by 11.1% year-on-year to ₹3,046 crore. Analysts had anticipated this growth, attributing it to a steady recovery in the base business following corrective measures implemented in FY25. These measures included leadership changes and improved synergies between divisions.
The company has been strategically increasing the share of its chronic drug portfolio in overall sales. In Q3, the share of chronic drugs rose by 200 basis points to 39.3%. This growth was driven by a 16.7% increase in cardiac drugs and a 14.4% rise in anti-diabetes medicines, underscoring the company's focus on high-demand therapeutic areas.
Consumer Health and Market Response
The consumer health business of Mankind Pharma showed signs of recovery, growing 5.2% year-on-year to ₹203 crore after experiencing a dip in the second quarter of FY26. Juneja expressed optimism, noting, "We expect growth to improve further."
On the stock market front, Mankind Pharma's shares gained 4.3% to close at ₹2,155.90 on the BSE on Tuesday. This uptick occurred amidst a broader market surge, fueled by the announcement of the India-US trade deal, with the Nifty Pharma index rising by 3.02%.
The Q3 results reflect Mankind Pharma's ongoing transition as it integrates BSV and focuses on expanding its chronic and specialty portfolios. While profit growth missed estimates, the company's strategic initiatives and domestic strength position it for potential long-term gains in the competitive pharmaceutical landscape.
