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Analyst Scrutiny Over Growth Trajectory
Shares of Mankind Pharma Ltd. fell nearly 4 per cent on Wednesday, as market watchers pointed to subdued organic growth despite the company's solid third-quarter financial results. The drugmaker's stock dipped as much as 3.8 per cent during intraday trading, hitting ₹2,080.1 per share, marking its sharpest decline since May 23, 2025. While the stock later pared some losses, it remained 3.5 per cent lower against a marginal advance in the Nifty 50 index.
Analysts noted that while revenue and EBITDA met or exceeded expectations, the core issue lies in the pace of organic domestic branded formulation growth. Systematix Institutional Equities cited integration and execution challenges, along with the anti-infective segment weighing on overall performance, leading them to maintain a 'Hold' rating with a revised target price of ₹2,467. Motilal Oswal echoed sentiments that the recovery has taken longer than anticipated, though management indicated growth is returning to track. The brokerage highlighted a wider gap between secondary and primary sales growth, partly due to a reduction in stockists and increased contribution from modern trade and e-commerce channels to over-the-counter sales.
Strong Revenue and Profit Gains
The company's financial report for the third quarter of the current fiscal year (Q3-FY26) revealed a profit after tax (PAT) of ₹414 crore, an increase from ₹378 crore in the same period last year. Revenue from operations grew by a healthy 11.5 per cent year-on-year, reaching ₹3,567 crore, up from ₹3,198 crore in Q3FY25. This financial performance, while positive on the surface, failed to outweigh the concerns regarding the sustainability and speed of future growth.
Domestic Market Performance
Mankind Pharma's domestic segment, which constitutes a significant 85 per cent of its total revenue, expanded by 11.1 per cent to ₹3,046 crore during the December quarter. This growth was primarily fueled by robust demand for its drugs in chronic therapy areas, specifically cardiac and anti-diabetes treatments. The company also reported a 5.2 per cent year-on-year increase in its consumer healthcare business, driven by established brands like Gas-O-Fast, Manforce Condom, and Ova News.
Diversified Business Segments
Looking ahead, Motilal Oswal noted that Mankind Pharma is actively pursuing several strategic fronts. These include gaining market share in chronic therapies, reviving growth in acute therapies, integrating synergies from the BSV acquisition, and recalibrating business policies for its consumer health division. The crucial factor for investors will be the tangible pick-up in growth resulting from these corrective actions, which remains the key monitorable going forward. The stock currently trades at 4.4 times its average 30-day trading volume, with a year-to-date decline of 5.8 per cent, compared to a 1.4 per cent fall in the benchmark Nifty 50.