Mankind Pharma

Mankind Pharma reported a robust start to FY26, with overall revenues increasing by 24.5% year-on-year to ₹3,570 crores. This growth was primarily fueled by strong domestic performance, chronic segment outperformance, and the consolidation of BSV's results. The company's reported EBITDA grew by 25.8% to ₹850 crores, resulting in a reported EBITDA margin of 23.8%. However, when compared to the adjusted EBITDA margin of Q1 FY25 (25.0%), there was a 120 basis point decline, mainly due to a reduction in gross margins.

The domestic business registered a healthy 19% year-on-year growth, with organic growth contributing 10%. Secondary sales increased by 9.2% year-on-year, outperforming the IPM growth of 8.6%. The chronic segment, excluding BSV, saw its share increase by 190 basis points year-on-year to 38.8%. The international business demonstrated exceptional growth, with revenue soaring by 81% year-on-year to ₹469 crores, although organic growth was in the single digits. The OTC business also contributed positively, growing 15% year-on-year to ₹237 crores, with modern trade and e-commerce channels growing approximately 50% year-on-year and now accounting for 11% of OTC sales.

Mankind is strengthening its R&D pipeline, focusing on candidates for autoimmune disease, anti-microbial resistance, and a recombinant biosimilar in the IVF segment, including GPR-119 for anti-obesity and anti-diabetes. The BSV acquisition is progressing well, with integration initiatives underway. A new biological facility is being set up at Ambernath to scale up and de-risk operations, with Phase 1 Capex of ₹150-200 crores and an estimated cash outflow of ₹100 crores in FY26, expected to complete by the end of next calendar year. BSV's Dydrogesterone facility is operating at approximately 60% capacity, with international market approvals anticipated by year-end.

Gross margins for the quarter declined by 130 basis points year-on-year to 70.5%, primarily due to an unfavorable sales mix and inventory-related accruals for slow-moving items. Profit after tax (PAT) decreased by 17.4% year-on-year to ₹445 crores, largely due to higher finance costs and increased depreciation from BSV consolidation. R&D expenses stood at ₹79 crores, representing 2.2% of sales. The effective tax rate for Q1 FY26 was 17.7%, up from 16.8% in Q4 FY25.

The company's CAPEX spend for Q1 FY26 was ₹127 crores, representing 3.6% of revenue, which is below the full-year guidance of 5%. Net debt reduced to ₹5,249 crores as of June 30, 2025, improving the net debt to EBITDA ratio to 1.6x from 1.8x in FY25. Mankind repaid ₹500 crores of commercial papers in Q1 FY26 and plans to repay an additional ₹1,500 crores of acquisition-related debt by October 2025, out of a total scheduled repayment of ₹2,000 crores for FY26. The total interest cost for acquisition debt for the year is estimated at ₹450-475 crores. The board also approved an interim dividend of ₹1 per share.

Mankind Pharma reiterated its full-year guidance for EBITDA margins at 25-26% and gross margins upward of 70%. The company expects BSV sales to grow 18-20% with margins of 26-28% for FY26. Management expressed confidence in the ongoing sales force changes, which are expected to drive better performance in subsequent quarters, with Q2 and Q3 anticipated to be stronger than Q1. The company also believes its diversified anti-diabetic portfolio will remain resilient against new entrants like GLP-1s, as older molecules continue to sustain market presence.