Shares of Mankind Pharma will be in focus today, July 7 after Incred initiated 'Add' coverage on the stock, citing product strategy and growth outlook. The brokerage, in its recent note has set a target price of Rs 2,821 on the stock, marking an upside of 11%.
Following years of growth driven by distribution reach and prescription volume, the pharma giants's defensible products segment has matured and it is moving towards research-led, niche and specialty therapies where competition is thinner, according to Incred.
The brokerage belives that genuine innovation led research and development is majorly absent across Indian pharma sector, which still into generic versions of off-patent molecules, and Mankind Pharma is not expected to become an exception. But, a calculated approach move into low-competition specialty niches is a more achievable route to above-market growth if execution follows.
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Chronic therapies now contribute about 40% of domestic sales, with cardiac drugs being the largest segment and generating higher margins than acute therapies. This shift towards chronic care has improved the company's earnings quality, but it has also been driven by slower growth in its acute business.
According to InCred, Mankind Pharma's acquisition of Bharat Serums and Vaccines (BSV) strengthens its presence in biologics segment and makes it the leader in the domestic gynaecology market. The brokerage believes the company's large sales force will help expand the reach of BSV's products over time, although the acquisition is expected to support long-term growth rather than provide an immediate boost.
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