Mankind Pharma Q4 FY26 earnings call

Mankind Pharma reported a strong Q4 FY26, with overall revenue increasing by 11.8% year-on-year to INR3,443 crores. The adjusted EBITDA margin for the quarter stood at 27.1%, marking a 400 basis point improvement from Q4 FY25, driven by a better sales mix and operating leverage. For the full financial year 2026, revenue grew by 17.0% year-on-year to INR14,278 crores, with an adjusted EBITDA margin of 25.4%. However, FY26 PAT marginally decreased by 3.4% year-on-year to INR1,938 crores, primarily due to higher finance and depreciation costs, and lower other income post the BSV acquisition.

The domestic business, excluding Consumer Healthcare, demonstrated robust growth, increasing by 12.9% in Q4 FY26 and 14.4% for the full year to INR12,217 crores. Organic growth, excluding OTC, reached 10.1% in Q4, the highest since the BSV acquisition, and 8.6% for FY26. This growth was broad-based, supported by strong performance in chronic therapies like cardiac (14.7% growth) and anti-diabetes (11.6% growth), and robust growth in the PSV specialty business. Mankind's chronic share increased by 120 basis points year-on-year to approximately 40% in Q4, with 13 brands now exceeding INR200 crores in sales.

The OTC business saw a 20% increase in revenue to INR213 crores in Q4 FY26, primarily fueled by a 57% year-on-year growth in modern trade and e-commerce channels. For the full year, OTC revenue grew 9% to INR879 crores. The international business, however, experienced a muted 4% year-on-year growth in Q4, reaching INR557 crores, largely due to geopolitical headwinds^🌐. Despite this, the full-year international revenue increased significantly by 35% year-on-year to INR2,061 crores, and the company remains optimistic about long-term opportunities.

Mankind Pharma is increasingly focusing on specialty chronic therapies and R&D-led innovation. During Q4, the company acquired the Rivotril brand from Roche, a key brand for neurological and psychiatric conditions, to strengthen its specialty chronic portfolio. The company's R&D expenses for FY26 stood at 2.8% of sales, up from 2.2% in FY25, aligning with its guidance of 2.5% to 3%. This investment supports the development of a more resilient and differentiated product pipeline, including a new best-in-class biotech facility in Vadodara.

The company's capex spend for FY26 was INR737 crores, representing 5.2% of total revenue, which is at the higher end of its guidance. This includes an investment of up to INR500 crores in its subsidiary, Mankind Medicare, for the Vadodara biotech facility. Net debt as of March 31, 2026, was INR3,932 crores, resulting in a net debt to adjusted EBITDA ratio of 1.1x. The company successfully repaid INR1,500 crores of commercial papers in Q3 FY26 and is on track to repay the remaining acquisition-related debt by FY28, with further repayments of INR1,250 crores in October and INR2,500 crores next year.

For FY27, Mankind Pharma expects double-digit top-line growth, aiming to outperform IQVIA. The adjusted EBITDA margin is projected to be in the range of 25.5% to 26.5%. Capex for FY27 is guided at 6% to 7% of revenue, and the net debt to adjusted EBITDA ratio is targeted at 0.5x. The effective tax rate is expected to increase to 25% to 26% in FY27 due to the expiry of the Sikkim tax exemption, up from 15-16% in FY26. The company anticipates high teens growth for its OTC business and high teens to 20% growth for its international business.