Buy Mankind Pharma; target of Rs 2760: Motilal Oswal

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26 Aug, 2025 12:21

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Following our Initiating Coverage on Mankind Pharma (MANKIND), we have highlighted certain key aspects from the recently released annual report. MANKIND has a strategic roadmap for growth through expansion in high entry barrier innovative product launches in the chronic/consumer segment and other adjacencies, transitioning from sexual wellness to consumer wellness in the over-thecounter (OTC) space. During FY22-24, its strategic product launches have focused on chronic therapies such as diabetes, cardiac, gynecology, CNS, and respiratory. Further, it is implementing efforts to deepen its presence in Tier I/ metro cities by engaging with key opinion leaders and forging strategic partnerships with hospitals. In addition to premiumizing products and extensions, MANKIND is expanding in the consumer wellness segment via product launches such as Nimulid.  Due to growth initiatives through both organic and inorganic means, the FCFE and return ratios have been impacted from FY20 to FY24. However, the CFO/ EBITDA ratio improved to ~89% during FY24. However, we anticipate an improvement in FCFE during FY24-FY26, with the increased benefits of initiatives implemented over FY22-FY24.

Overall, we expect a 14% earnings CAGR over FY24-26, fueled by an 11% sales CAGR and a 180bp margin expansion. We value MANKIND at 42x 12m forward earnings to arrive at our TP of INR2,760. Reiterate BUY.

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