Mankind's ambitious plans drive MOFSL to initiate with a Buy, 20% upside likely

Mankind Pharma shares have risen over 45 percent in the past year.

Motilal Oswal Financial has initiated coverage on Mankind Pharma with a 'Buy' call, driven by bullishness over the drugmaker's efforts to enhance its presence across geographies, expansion plans in chronic therapies, and investments towards the consumer health segment.

Anticipating these growth lever to yield results for Mankind, the brokerage assigned a price target of Rs 2,650 for the stock, reflecting a 20 percent upside. At 09.45 am on June 13, shares of Mankind Pharma were trading quiet at Rs 2,228 on the NSE.

Within a span of 30 years, Mankind Pharma claims to have built a strong domestic formulations franchise, and now has the fourth largest market share in the segment. Mankind has also increased presence across new markets in tier II cities and beyond, becoming an industry leader in the prescriptions market, the MOFSL note said.

"Mankind is expanding its presence in chronic therapies, and is also firming up its presence with a new differentiated launch, along with an in-licensing opportunity. It has increased the field force for chronic therapies to expand its reach in metro/Tier-I cities," the note said. Based on these efforts, MOFSL expects a 12 percent sales CAGR in chronic therapies for Mankind over FY24-27.

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The brokerage also noted Mankind's 'superior' execution, strong brand visibility, sustainable earning growth and robust return ratios, thus projecting a 16 percent earnings CAGR over FY24-27.

Much of this growth is expected to be driven by two main levers, chronic therapies - currently at 36 percent of domestic formulations sales - and an expanding niche products portfolio.

MOFSL notes that Mankind is looking to expand its presence across metros and tier-I cities, with contribution from these amounting to more than half of its total domestic formulation sales.

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