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Dolat Capital Report
Mankind Pharma Ltd.'s Q4 FY24 results came above our estimates due to-
better than expected gross margin,
lower other expense and
higher other income.
However sales came in-line with estimates.
For FY25 management guided mid-teens revenue growth for its export (ex one-off) and consumer business, along with overall Ebitda margin of 25- 26%. The company will look at combination of debt and equity raise for any acquisition and will maintain financial discipline.
Balance sheet not likely to become overleveraged and debt/Ebitda will not exceed 2-2.5 times. Management also guided that it will not go ahead with any acquisition that is Ebitda margin or return on capital employed dilutive.
We upgrade our FY25E/FY26E EPS estimates by 1.5%/1.4% assuming higher other income. Maintain ‘Accumulate' rating with revised target price of Rs 2,554 (earlier Rs 2,520) at 38 times (adjusted for amortisation) FY26E price/earning.
Key risks: Adverse pricing regulation in India by NPPA and compliance issues on any facilities.
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