Mankind Pharma, India’s fourth-largest pharmaceutical company, saw a significant surge in its stock price during early morning trading today, reaching a new all-time high of ₹2,597 per share.
The 7% rise followed a positive outlook from global brokerage firm Investec, which initiated its coverage on the stock with a ‘buy’ rating. Investec set a target price of ₹3,300 per share, indicating a potential upside of 36% from the previous close.
The brokerage cited Mankind Pharma’s strong execution capabilities and its recent acquisition of Bharat Serums and Vaccines (BSV) as key factors driving this bullish sentiment.
According to Investec, aligning Mankind’s brand equity and BSV’s super-speciality strengths offers the pharmaceutical giant a competitive edge. Specifically, BSV’s research and development expertise, combined with its sourcing capabilities, strengthens Mankind’s ability to capture growth in both domestic and international markets.
This strategic acquisition not only boosts Mankind’s capabilities but also positions it for sustained long-term growth, a fact that has not been fully priced into the stock, according to the brokerage.
Investec pointed out that Mankind’s robust distribution network in India will play a pivotal role in enhancing BSV’s sales in the country. The complementary synergies between the two companies are expected to yield significant benefits, particularly in the underpenetrated in-vitro fertilization (IVF) market.
This growing segment presents substantial growth potential, with the Mankind-BSV partnership poised to become a global leader in this space. The market has, as per Investec’s analysis, underestimated the strategic value and growth potential of BSV’s specialty business, which is anticipated to be a major driver of Mankind’s future performance.
This positive outlook from Investec follows an earlier revision from domestic brokerage firm Motilal Oswal, which had raised its target price for Mankind Pharma to ₹2,760 per share.
Motilal Oswal’s assessment focused on Mankind’s efforts to diversify its product portfolio, particularly its push into chronic therapy prescription drugs. The company has also been working to scale several of its brands, aiming to achieve revenues exceeding ₹1 billion for each.
In addition to its strategic acquisitions, Mankind has a proven track record of superior execution, which has reassured analysts regarding its future cash flow generation. The company’s ability to smoothly integrate past acquisitions into its operations has provided strong visibility into long-term free cash flow, another factor that has contributed to the stock’s recent upward trajectory.
Mankind Pharma made its debut on the Indian stock exchanges on May 9, 2023, with an issue price of ₹1,080 per share. The stock was listed at ₹1,422, representing a 31.7% premium over the issue price.
Since its listing, Mankind has performed exceptionally well, consistently breaking new price milestones. In November, the stock surpassed the ₹2,000 mark, and today it came close to ₹2,600, marking a 138% appreciation from its initial issue price.
Investors have been particularly drawn to Mankind’s strong presence in the Indian market and its portfolio of well-known consumer healthcare brands. The company has approximately 36 brands, including popular names like Manforce, Prega News, Unwanted 72, Moxikind, and Nurokind. Many of these products rank among the Top 10 in their respective markets, reinforcing Mankind’s brand strength.
The broader outlook for India’s pharmaceutical industry is also optimistic, with a projected revenue growth rate of 10%. This growth will be fueled by factors such as increased healthcare spending, an ageing population, the rising prevalence of lifestyle diseases, and greater awareness of quality healthcare. These industry tailwinds further bolster the outlook for companies like Mankind Pharma, which is well-positioned to capitalize on these trends.
As of today’s market close, Mankind Pharma’s stock is trading at ₹2,573 per share, reflecting a remarkable performance since its IPO. With analysts projecting further growth, bolstered by strategic acquisitions and a strong brand portfolio, Mankind remains a compelling option for investors looking to tap into India’s expanding healthcare sector.
