Jefferies Keeps Mankind Pharma Among Top Picks Despite Q2 Setback — Check Revised Target Price

Mankind Pharma Ltd. remains one of Jefferies preferred picks despite the September quarter setback. According to the brokerage the company is among the best-in-class franchises currently navigating a temporary rough patch.

However, Jefferies has trimmed the target price of Mankind Pharma to Rs 3,000 from Rs 3,100, citing a slower-than-expected recovery in its reorganisation efforts.

The brokerage said the company's September quarter results were broadly in line with subdued expectations, with operating performance steady but margins likely to stay at the lower end of guidance in the near term.

Jefferies believes that Mankind is poised for a recovery in the second half of fiscal 2026, as the benefits of restructuring and integration of the BSV acquisition begin to materialise. The brokerage expects operating expenses to moderate in the coming quarters, helping margins recover.

The firm has lowered its FY26–27 Ebitda estimates by 2–5% to reflect the delayed recovery and values the stock at 28 times September 2027 estimated EV/Ebitda.

Mankind's September quarter revenue rose 20% year-on-year to Rs 3,700 crore, while Ebitda grew 8% to Rs 920 crore, both in line with Jefferies' estimates. Net profit stood at Rs 510 crore, down 22% year-on-year but up 17% sequentially, about 10% above expectations due to higher other income and a lower effective tax rate.

Within the domestic business, India formulation sales increased 15% year-on-year to Rs 2,960 crore, with core growth of 6.6%, reflecting the impact of slower execution of field force restructuring. The consumer health business declined 2% year-on-year to Rs 226 crore due to Goods and Services Tax (GST) impact, while export formulations surged 83% to Rs 510 crore, driven by higher base effect and moderate core growth of 5%.

Jefferies noted that the reorganisation efforts initiated last year are taking longer than anticipated to deliver results. The management admitted that it was “a bit optimistic” in expecting visible outcomes within six to nine months of implementing changes in the sales structure.

Despite the delay, management remains confident of a stronger performance in the second half of fiscal 2026, supported by operational efficiencies and improving sales momentum.

Mankind maintained its Ebitda margin guidance of 25–26%, though it now expects to remain at the lower end of this range. The company also guided for 18–20% overall revenue growth, comprising 12–15% domestic and 18–20% export growth, and aims to reduce net debt-to-adjusted Ebitda to 1.2x by March 2026.

In terms of segmental performance, chronic therapies such as cardiac, anti-diabetic, and respiratory continued to outperform the Indian Pharmaceutical Market (IPM), while acute segments such as anti-infective, gastro, dermatology, and pain lagged behind.

During the quarter, Mankind's chronic share in India's prescription business improved by 200 basis points year-on-year to 37.1%, with chronic portfolio growth at 12%, outpacing the 11.2% IPM chronic growth.