Mankind Pharma shares fall 6% despite 30% Q1 PAT growth; here's why

Brokerages said that Mankind Pharma's Consumer Healthcare growth was muted in Q1, impacted by the discontinuation of discounted cash-and-carry sales.

Mankind Pharma shares fell as much as 6 per cent in intraday trade on Friday despite the company reporting a nearly 30 per cent rise in net profit and a 13 per cent increase in revenue for the June quarter (Q1FY27).

 

The stock opened higher at ₹2,604 but surrendered its gains to slip into the red, hitting a low of ₹2,422 on the National Stock Exchange (NSE).

 

As of 2:15 PM, the stock was underperforming the market, trading 4.1 per cent lower at ₹2,468. In comparison, the benchmark Nifty 50 was up 70 points, or 0.29 per cent, at 24,390.

 

Motilal Oswal Q1 results 

 

For the June quarter, Mankind Pharma has reported a consolidated net profit of ₹568.06 crore, reflecting a rise of 29.6 per cent on Y-o-Y basis as total expenses grew more slowly than revenue and finance costs declined.

 

Its revenue from operations increased 12.9 per cent Y-o-Y to ₹4,030.59 crore in the reporting three-month quarter versus ₹3,570.35 crore in the year-ago quarter. Other income declined to ₹45 crore from ₹79.88 crore, leaving total income 11.7 per cent higher at ₹4,075.59 crore.

 

Total expenses rose 6.3 per cent to ₹3,310.08 crore in the quarter under review from ₹3,112.91 crore. Finance costs fell 35.6 per cent to ₹109.98 crore, largely driven by debt repayment.

 

The firm's gross margin expanded 225bp to 72.8 per cent Y-o-Y. Ebitda grew at 24.7 per cent Y-o-Y to ₹1,06o crore, while Ebitda margin expanded 250bp Y-o-Y to 26.2 per cent.

 

Mankind Pharma: Motilal Oswal keeps 'Buy'

 

Post quarterly results, Motilal Oswal Financial Services has maintained 'Buy' rating on Mankind Pharma and assigned a target price of ₹2,975. The target implies an upside of 15 per cent from the previous close of ₹2,575.90.

 

The brokerage said that Mankind Pharma's revenue and Ebitda came in line with expectations for 1QFY27. However, it missed PAT expectations for the quarter, driven by lower other income and a higher tax rate.

 

The brokerage noted that Consumer Healthcare growth was muted in the quarter, impacted by the discontinuation of discounted cash-and-carry sales. The Consumer Healthcare business, which accounted for 7 per cent of domestic sales, grew 3.9 per cent Y-o-Y to ₹250 crore.

 

The management, however, expects the segment to deliver high single-digit to double digit growth next quarter onwards with normalisation of channel rationalisation.

 

MOFSL has reduced its earnings estimate for FY27 by 4 per cent, factoring in muted performance of the consumer health segment.

 

JM Financial retains 'Reduce' 

 

JM Financial said that Mankind Pharma reported a broadly in-line quarter as it retained its 'Reduce' rating, with a target price of ₹2,455 (earlier ₹2,359).

 

Analysts said that exports remained a key growth driver (+29 per cent Y-o-Y) on the back of strong BSV (+25 per cent Y-o-Y), US performance and currency depreciation (12–13 per cent points contribution). 

 

However, the Consumer Healthcare growth remained subdued due to the discontinuation of the cash-and-carry business, the brokerage said.

 

The brokerage estimates revenue, Ebitda and PAT CAGR of 11 per cent, 12 per cent, and 16 per cent over FY26–29.

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