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Informist, Thursday, Nov. 6, 2025

 

--GST cut caused brief disruption, see growth recovery in H2

--CONTEXT:Mankind Pharma mgmt's comments at post-earnings call with analysts
--Retain 18-20% growth guidance for Bharat Serum Vaccines FY26
--We overexpected, not happy with our performance

 

By Sunil Raghu and Arya S. Biju

 

MUMBAI – Mankind Pharmaceuticals Ltd. said that higher impact of goods and services tax cut, cost of integrating recently acquired Bharat Serum Vaccines and changes in its employee profile impacted the earnings of the company in the September quarter negatively.

 

The consolidated revenue of the company in the September quarter not just missed analysts' expectations but grew at the slowest pace in the last four quarters. Its profit growth fell for the fourth consecutive quarter and at the fastest clip year-on-year since the March quarter of 2022-23 (Apr-Mar), according to data available with Informist.

 

The company reported its September quarter earnings late Thursday. Its consolidated net profit stood at INR 5.12 billion, nearly 22% lower on year but up nearly 17% sequentially. Its top line grew nearly 21% on year to INR 36.97 billion. Analysts had pegged the bottom line of the company at INR 4.87 billion and its revenue at INR 37.30 billion.

 

The company management said that the impact of goods and services tax was higher for them compared with Indian Pharma Market due to their stronger presence in Tier 2 to Tier 3 cities. "While GST related changes in September 2025 caused a brief disruption, we expect growth recovery in H2," the company management said in a post-earnings analysts call Thursday. The impact was in line with the street view which believed that while cutting GST, the government had left the rates for active pharmaceutical ingredients unchanged at 18%, while the GST for finished goods was reduced to 5% from 12%. This put pressure on the company's margins. The company's gross margins during the quarter were down 20 basis points to 71.3%, compared with 71.5% in the year-ago quarter.

 

The management said that the other reason Mankind Pharma recorded low double-digit year-on-year growth in its consolidated net revenue was due to integration-related costs for the recently acquired Bharat Serum Vaccines. Higher depreciation and amortisation expenses following the acquisition negatively impacted profitability in the near term. The company, however, said it was confident of delivering healthy performance for Bharat Serum Vaccine portfolio FY26 onwards, adding that they maintain their full year guidance of 18-20% growth for Bharat Serum Vaccine.

 

The final reason company management attributed the slow growth to was the changes it brought in the profile of their employees. "...we brought a lot of changes in people and we thought that we will be able to replace, train, make them as good as the older people, those who had fantastic relationship. So, we may be over expected that. It did not happen in nine, 12 months time," the management said.

 

Mankind Pharma said its modern trade and e-commerce channel registered 12% year-on-year growth in its sales in the Apr-Sept compared with 8% for the same period last year. The company's export revenue during the quarter increased 83% year on year to INR 5.13 billion, led by increase in its base business and Bharat Serum Vaccine consolidation. The organic growth during the quarter, too, was single digit, the management said.

 

On Thursday, shares of the company closed 2.6% lower at INR 2,309.10 on the National Stock Exchange.  End

 

Edited by Akul Nishant Akhoury

 

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