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On Thursday, JPMorgan analysts revised the price target for Mankind Pharma Ltd (MANKIND:IN), reducing it to INR2,900 from the previous INR3,150. Despite this adjustment, the firm retains an Overweight rating on the stock. This decision comes after Mankind Pharma reported its fourth-quarter revenue, which aligned with expectations. The company’s domestic pharmaceutical business, excluding the BSV portfolio, demonstrated a robust 10% year-over-year growth, surpassing the Indian Pharmaceutical (TADAWUL:2070) Market (IPM) by 270 basis points. Additionally, the consumer business maintained its mid-teen growth momentum.
The adjusted EBITDA margins, however, fell short of consensus and JPMorgan’s own estimates by 260 basis points and 110 basis points, respectively, closing at 23%—a 120 basis points decline year-over-year—due to increased other expenses. Reflecting on the full fiscal year of 2025, the domestic business experienced a modest 9% year-over-year growth, which was slightly ahead of the 7.9% growth in the IPM. Nevertheless, the recently acquired BSV portfolio faced integration challenges.
Looking ahead, company management has provided guidance for the BSV portfolio’s top-line growth at 18-20% and anticipates a margin improvement of 50-100 basis points. The India prescription business is expected to grow at 1.2 times the rate of the IPM growth starting from the second quarter onwards, with a consolidated margin guidance of 25-26%. JPMorgan analysts find this margin guidance slightly conservative, considering the low base.
The firm’s position as a leader in India and its capacity for volume-led growth are seen favorably by JPMorgan, but they emphasize that sustained outperformance in India and a stronger ramp-up in the BSV sector are key factors to monitor. Consequently, JPMorgan has reduced its EBITDA estimates for fiscal years 2026 and 2027 by 5-6% due to the softer margin guidance. The revised price target reflects these updated estimates while continuing to support an Overweight rating on Mankind Pharma stock.
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