Earnings Outlook
Mankind Pharma consol PAT seen up 18.5% on new launches
This story was originally published at 18:59 IST on 4 November 2024
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By Sweta Roy
MUMBAI – Mankind Pharma Ltd. is expected to deliver a double-digit growth in net profit and revenue for the September quarter on account of strong performance in the cardiac, gastro, and anti-diabetic segments. New product launches in the chronic space and in-licensing opportunities would also have driven the company's earnings for this quarter, according to analysts.
The drugmaker’s consolidated net profit is expected to rise to INR 5.94 billion, up 18.6% on year, and revenue is likely to rise to INR 30.45 billion, up 12.4%, according to the average of estimates by five brokerages. The company's earnings before interest, tax, depreciation, and amortisation are likely to be INR 7.83 billion. On a sequential basis, the company's revenue is seen rising 5.2% and net profit is seen rising 10.7%.
The company is expected to outperform its peers, Kotak Institutional Equities said, factoring in an 11% growth for the company's domestic formulations segment. A scale-up in the chronic segment and a recovery in the acute segment are expected to be the key drivers for the company's steady growth during the quarter in India, HDFC Securities said.
HDFC Securities expects the company's consumer healthcare business to grow 7-8% on year. Kotak expects a partial recovery in the over-the-counter segment and an 11% growth in the company's prescription segment. Motilal Oswal said the company's prescription sales are likely to rise 10% on year to INR 25.7 billion.
HDFC Securities expects the company's Jul-Sept exports to rise 40% on year on the back of a rise in the US supply opportunities, but said growth in exports will likely remain flat on quarter. Mankind Pharma's international sales are estimated to rise 20%, according to Kotak Institutional Equities. Motilal Oswal expects export sales to rise 25% on year, led by niche launches and market share gains in the company's base business. The company's consumer health segment revenues are seen rising 7% in the quarter on the back of improving awareness, the brokerage said.
The highest estimate for the Jul-Sept net profit was INR 6.05 billion by HDFC Securities and the lowest estimate was INR 5.59 billion by Kotak Institutional Equities. Of the five estimates, Systematix Shares and Stocks (India) gave the highest estimate for the company's revenue for the September quarter at INR 30.84 billion, while the lowest estimate was from Motilal Oswal at INR 29.98 billion.
Systematix Shares and Stocks said Mankind Pharma's domestic branded formulation revenue will likely grow in the low double-digit while growth in the consumer business, "which has been lacklustre since a few quarters", may recover. In terms of profitability, while Kotak Institutional Equities said it expected the company's gross margins to expand 130 basis points to 70.8% in Jul-Sept, HDFC Securities said it expected margins to rise 186 bps on the back of an improving business mix. The brokerage said the company will likely post a consolidated EBITDA of INR 7.5 billion with an EBITDA margin of 25%. However, Kotak Institutional Equities expects the EBITDA margin to remain flat on the previous quarter, at 23.7%, adjusted for one-off merger and acquisition costs.
Investors should monitor the updates on new product launches for the company, Motilal Oswal said. The company will detail its Jul-Sept earnings Tuesday. On Monday, the shares of the company closed at INR 2,731.20 on the National Stock Exchange, up 1.9%.
Following are the Jul-Sept earnings estimates for Mankind Pharma given by five brokerage firms.
Brokerage Firm | Net sales | Net profit | EBITDA |
-----------(in INR million)--------------------- | |||
Antique Stock Broking Ltd | 30,703.00 | 6,030.00 | 7,854.00 |
Kotak Institutional Equities | 30,219.00 | 5,589.00 | 7,541.00 |
Motilal Oswal Financial Services Ltd | 29,982.00 | 5,991.00 | 7,945.00 |
Systematix Shares and Stocks (India) Ltd | 30,844.00 | 6,043.00 | 7,974.00 |
HDFC Securities Ltd | 30,501.00 | 6,053.00 | 7,839.00 |
Average | 30,449.80 | 5,941.20 | 7,830.60 |
End
Edited by Akul Nishant Akhoury
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