Mankind Pharma Ltd IPO Review: Should You Subscribe? Expert Insights Here

About Mankind Pharma:

Mankind Pharma is engaged in growing, manufacturing, and advertising a various vary of pharmaceutical formulations throughout varied acute and persistent therapeutic areas, in addition to a number of client healthcare merchandise. In keeping with firms, DRHP Mankind is India’s fourth-largest pharmaceutical firm when it comes to Home Gross sales and second-largest when it comes to gross sales quantity for the Monetary 12 months 2022.

Mankind Pharma has a powerful concentrate on the home market, with income from operations in India accounting for 97.60 % of its whole income within the monetary 12 months 2022. The corporate has developed 36 manufacturers within the pharmaceutical enterprise and boasts one of many largest networks of medical representatives within the Indian pharmaceutical market.

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Portfolio of the corporate in key therapeutic and Income breakup from home Gross sales

Firm’s highest-selling pharmaceutical manufacturers

Monetary:

Mankind Pharma has proven constant income progress over time. The corporate’s income has grown at a CAGR of 15.7% during the last 5 years.

The corporate’s return on fairness (ROE) has additionally been persistently above 20% during the last 5 years.

Gross sales progress is properly complemented by EPS progress, which signifies that the corporate is turning into extra environment friendly in producing earnings from its gross sales. This may very well be resulting from quite a lot of causes, together with cost-cutting measures, value will increase, or a rise in gross sales of higher-margin merchandise.

Key Monetary Ratios and Developments:

Administration:

Ramesh Juneja is the Chairman and a Complete-Time Director of our Firm. He’s a founder and Promoter of our Firm. He has been related to our Firm since its incorporation as a Director and Promoter. He doesn’t maintain any formal instructional {qualifications}. He has expertise of over 31 years within the pharmaceutical trade. 

Rajeev Juneja is the Vice-Chairman and Managing Director of our Firm. He’s additionally a Promoter of our Firm and has been related to our Firm since December 22, 1992. He doesn’t maintain any formal instructional {qualifications}. He has expertise of over 29 years within the pharmaceutical trade.

Sheetal Arora is the Chief Govt Officer and a Complete-Time Director of our Firm. He’s additionally a Promoter of our Firm and has been related to our Firm since September 21, 2007. He holds a bachelor’s diploma in commerce from the Srikrishnadevaraya College, Anantapur. He has expertise of over 14 years within the pharmaceutical trade.

Positives:

• Mankind Pharma has a promising enterprise mannequin with a concentrate on home markets and important potential for future progress.
• The corporate has a diversified portfolio with sturdy market positions in key therapeutic areas, together with antibiotics, gastrointestinal, and respiratory segments.
• Mankind Pharma has efficiently constructed and grown a client healthcare franchise with sturdy model recognition, together with manufacturers like Manforce Condom, Prega Information, and Gasoline-O-Quick.
• The corporate has broad market protection, specializing in affordability and accessibility.

Dangers:

• Mankind Pharma might face elevated competitors and pricing pressures sooner or later, which might lead to a lack of market share and declining revenues and earnings.
• The pharmaceutical and client healthcare trade is closely regulated, and firms should receive and keep quite a few approvals, licenses, and registrations as a way to function.
• Mankind Pharma generates a good portion of its income from India and depends on third-party distributors and retailers for the sale and distribution of its merchandise, which might impression its skill to successfully market and distribute its merchandise.

Valuation:

Of the numerous Pharma IPOs since 2015, solely half of them are buying and selling above their supply value a few of that are Syngene, Alkem, Laurus, Tatva Chintan with itemizing TTM PE from 20-45X. Primarily based on the worth band, the corporate is being listed at Rs 43,000 crore on the higher finish of the worth band. This means a price-to-earnings (P/E) ratio of round 31x to 32x primarily based on TTM earnings.

ChrysCapital purchased a ten% stake in Mankind Pharma in 2018 for about 2200 Crores which valued the corporate at round 22,000 crores at 6X P/S and 33 occasions FY18 Earnings. The present itemizing is going on on the similar valuation when the revenues have doubled during the last 5 years. Primarily based on our Proprietary valuation instrument, the inventory is anticipated to checklist close to our truthful worth estimate.

MoneyWorks4Me Opinion

The important thing drivers for progress within the pharmaceutical market embrace rising revenue ranges, authorities initiatives selling healthcare entry, rising life expectancy, and the expansion of way of life illnesses. Mankind Pharma has important income era potential in segments equivalent to diabetes and cardiovascular illnesses, that are anticipated to drive progress within the pharmaceutical market. The rise in medical health insurance protection can be anticipated to drive progress by offering larger entry to healthcare services.

Mankind Pharma has acquired a formulation manufacturers enterprise which has enabled it to enter new fields like oncology and transplants. Moreover, it’s increasing its portfolio into anti-diabetes and coronary heart failure remedy. Moreover, Mankind has acquired an bronchial asthma therapy model from Dr Reddy’s Laboratories, permitting it to interrupt into new persistent therapies. Nonetheless, the corporate has not supplied any particulars on their impression on its earnings.

Contemplating the aforementioned progress drivers, Mankind Pharma seems to be well-positioned to learn from the beneficial surroundings within the pharmaceutical trade. Its diversified portfolio, established client healthcare franchise, and important manufacturing and R&D capabilities, the corporate is poised to capitalize on the rising demand for healthcare services. Moreover, the corporate’s concentrate on affordability and accessibility, broad market protection, and profitable model recognition bodes properly for its future progress prospects.

Suggestion: Aggressive traders can Apply

Mankind Pharma is anticipated to do properly over the following few years because it wins extra shoppers & orders. Even when the valuation is stretched (already assumes excellent execution and progress within the subsequent 2 years), we’d suggest aggressive retail traders can apply for 1-2 tons. One might select to promote on the itemizing day if the worth achieve is greater than 15%-20%.

Necessary factors to think about:

1. IPOs in a well-liked sector usually will get oversubscribed and retail investor is lucky if he receives even 1 odd lot (Rs 15,000) in IPO allotment. Since this funding quantity is small for our common investor, we suggest SUBSCRIBE in good firms with favorable prospects over the medium time period.
2. Nonetheless, don’t think about massive investments in IPO shares post-listing as they get listed at even increased valuation; moreover, they might overpromise for IPO success however under-deliver in actuality.
3. Conservative traders who want to personal a portfolio of Core firms should keep away from investing in costly or mid-small cap IPO.

Mankind Pharma Ltd IPO Tentative Timetable:

Retail Particular person Investor IPO Lot Measurement:

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