Mankind Pharma misses Q3 profit view as expenses jump

Manforce condom and Prega News pregnancy kit maker reported a consolidated net profit of Rs 380 crore ($43.99 million) for the quarter ended December 31

Mankind Pharma reported a smaller-than-expected third-quarter profit on Thursday, hurt by a sharp rise in expenses.

Manforce condom and Prega News pregnancy kit maker reported a consolidated net profit of Rs 380 crore ($43.99 million) for the quarter ended December 31. Analysts on average had expected a profit of Rs 448 crore, as per data compiled by LSEG.

Mankind said the $1.6 billion acquisition of Bharat Serums and Vaccines, effective October, also impacted the quarterly results, making them not comparable to the year-ago quarter. It had reported a profit of Rs 454 crore in the previous year.

Revenue rose 24%, in line with analysts' expectations, driven by an increase in market share of its chronic illness drugs in India to 37.6% from 35.6%.

Total expenses rose 33% year-on-year as finance costs jumped to 2.21 billion rupees from 92 million rupees, while employee-related costs expanded 25%.

Indian drugmakers such as Mankind Pharma have benefited from strong domestic demand for their specialty drugs and those used to treat chronic illnesses. New launches in the chronic drug segment have also driven growth in the last few quarters.

However, analysts at HDFC Securities in a note said that Mankind Pharma's earnings in the quarter could be impacted due to costs from the acquisition and integration of Bharat Serums and Vaccines.

Peer Torrent Pharma will report third-quarter results on Friday.