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Informist, Tuesday, Nov. 5, 2024

By Steffy Maria Paul and Anjana Therese Antony

MUMBAI – Mankind Pharma Ltd. expects to repay in the next three years a debt of INR 100 billion it had raised to acquire Bharat Serums and Vaccines Ltd., its management said in a post-earnings call with analysts. This could be done through qualified institutional placement and liquidation of non-core assets, the management said. The Delhi-based company also expects its net debt to be not more than two times its earnings before interest, tax, depreciation, and amortisation for 2025-26 (Apr-Mar). 

In October, Mankind Pharma acquired biopharmaceutical company Bharat Serums for an enterprise value of INR 137.68 billion. The acquisition was funded through a combination of internal accruals and external debt, arranged through a combination of non-convertible debentures and commercial papers. 

The company also said it managed to control its other expenses during the quarter. Mankind Pharma's other expense for the quarter was INR 7.05 billion, up over 12% on year but down nearly 8% sequentially. The company said its other expenses during the June quarter were higher on the back of "a certain acquisition-related cost" other than Bharat Serum and the introduction of four new divisions. This normalised during the current quarter, it said. 

Post market hours Tuesday, the drug manufacturer reported a consolidated net profit of INR 6.53 billion, up 30.4% from INR 5.01 billion a year ago. This is also higher than the INR 5.94 billion analysts had expected. Its revenue for the quarter was INR 30.77 billion, up 13.6% from INR 27.08 billion a year ago, also beating analysts' estimate of INR 30.45 billion. 

The company said it saw a fairly decent season for both its chronic and acute segments. While the company's chronic segment outperformed the industry due to strong performance in the cardiac and anti-diabetic segments, it said its revenue growth for the quarter was impacted by regulatory headwinds in certain key respiratory and gynaecology products in the acute segment. However, the company expects the impact of these regulations to ease during Oct-Mar. 

Mankind Pharma expects its export operations to grow in double digits for the current financial year owing to a favourable generic cycle in the US and a pickup in sales in the rest of the world. The company's revenue from exports was up 57% on year at INR 2.81 billion due to an increase in the company's base business on the back of new launches. During the quarter, the company launched one new product in the US, taking the total launched products to 42, it said in a post-earnings investor presentation.

The pharma company further said Bharat Serums' formulations business grew 13% during Apr-Sept, with its German active pharmaceutical ingredient business declining by 15%, and EBITDA margin expanding to 26% from 23%. The company expects Bharat Serums to grow more than 15% in Oct-Mar with its EBITDA margin improving. The company added that the gross margin of Bharat Serums' international operations was a tad higher than its domestic operations and is expected to achieve growth by improving both penetration in the existing market and by entering new markets. 

When it comes to its consumer healthcare business, the company expects this segment to grow in high single digits to low double digits during the current financial year, and expects the business to grow in double digits after FY25. The company sees the EBITDA margin for the segment to remain in the range of 15-20%. Revenue from the company's consumer healthcare business was up 20% on year to INR 2.32 billion and the segment's EBITDA margin for the quarter was 19.1%. 

Mankind Pharma said it grew 7.2% in tier-II to tier-VI towns during the quarter, higher than the industry's growth of 6.9%. During the first half of the financial year, the company grew 1.1 times compared to the industry in these regions. In metros and tier 1 towns, the company grew 9.8%, higher than the industry's growth of 8.8%. For the six months ended September, the company grew around 1.2 times the industry in these regions, the management said.

Tuesday, shares of Mankind Pharma closed at INR 2,714.25 on the National Stock Exchange, down 0.6%. However, the stock has risen 7.3% in the past seven days and 53% in 52 weeks. End

Edited by Deepshikha Bhardwaj

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