Summary
Mankind Pharma Limited - Q3 FY26 Earnings Call Summary Tuesday, February 03, 2026 6:00 P.M. IST
Event Participants
Executives 7 Abhishek Agarwal, Arjun Juneja, Ashutosh Dhawan, Prakash Agarwal, Rajeev Juneja, Sheetal Arora, Sudipta Roy
Analysts 6 Chintan Sheth, Dheeresh, Kunal Dhamesha, Kunal Randeria, Neha Manpuria, Tushar Manudhane
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹3,567 crores | +11.5% YoY; Driven by 11.1% Domestic growth and 14.1% Export growth. |
| Domestic Revenue | ₹3,046 crores | +11.1% YoY; Supported by 9.1% organic growth (excl. OTC) and strong BSV performance. |
| Export Revenue | ₹521 crores | +14.0% YoY; Mankind organic exports grew mid-single digits, remainder from BSV. |
| Adjusted EBITDA Margin | 25.9% | -170 bps YoY; Impacted by higher R&D (+70 bps) and employee costs. |
| Reported EBITDA Margin | 22.9% | -300 bps vs Adjusted; Impacted by labor code adoption, stamp duty, and asset impairment. |
| Profit After Tax (PAT) | ₹414 crores | +9.5% YoY; 11.6% margin, slightly offset by lower finance costs. |
| Net Debt | ₹4,294 crores | Improved from ₹4,700 crores in Q2; Net Debt/Adjusted EBITDA at 1.3x. |
| R&D Expenses | ₹102 crores | 2.9% of sales; Increased from 2.2% YoY, within guidance range. |
| Cash EPS | ₹15.6 | +12.1% YoY; Adjusted for non-cash items like depreciation. |
Geographic & Segment Commentary
- Domestic Pharma: Recorded 11.1% YoY growth with organic growth at 9.1%. While acute segments (anti-infectives) remained soft, Chronic therapies outperformed IPM, growing at 16.7% in Cardio and 14.4% in Anti-diabetes.
- Consumer Healthcare (OTC): Revenue grew 5.2% YoY, recovering from a decline in Q2. Secondary sales for Gas-O-Fast (+33%) and Ova News (+36%) were strong, while modern trade and e-commerce now contribute 13% of segment sales.
- BSV (Bharat Serums and Vaccines): Performance was robust with 20%+ YoY growth in Q3. The prescription portfolio transitioned to Mankind in November 2025, and 9M FY26 sales have already surpassed full-year FY25 levels.
- International Business: 9M FY26 revenue reached ₹1,503 crores (+51% YoY) due to BSV consolidation. The Udaipur facility received EU GMP certification, enhancing long-term export capabilities in niche molecules.
Company-Specific & Strategic Commentary
- Workforce Transformation: Completed a 12-15 month team restructuring affecting ~20% of the field force. Management noted that while this caused temporary insecurity and attrition, stability has returned with a focus on a “daily sales” and “no target” culture.
- Chronic Portfolio Milestone: Increased chronic contribution to 36.7% of domestic sales (+200 bps YoY). The company now has 13 brands exceeding ₹200 crores in revenue, up from 11 in FY25.
- Digital and Hospital Strategy: Increased focus on corporate hospital penetration and digital agility to improve field force PCPM, which rose to ₹7.2 lakhs from ₹6.5 lakhs in FY25.
- Channel Optimization: Reduced the number of OTC stockists and ceased “cash and carry” business to prevent rate cuts and ensure channel hygiene.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA Margin | ~25.0% for FY26 | Current 9M margin (24.9%) is at the lower end of the guided range. |
| Capex | 4% to 5% of Revenue | Management confirmed FY26 spend remains on track with 9M at 4.4%. |
| Domestic Growth | Outperform IPM | Expecting recovery in acute/anti-infectives in coming quarters as new teams mature. |
| Product Launch | GLP-1 (Day 1 Launch) | Targeted for late March 2026 to participate in the innovator-to-generic transition. |
Risks & Constraints
| Risk | Context |
|---|---|
| Workforce Attrition | The massive team rejig (20% new staff) led to a loss of doctor relationships in the acute/GP segment. Management is monitoring “heart and energy” levels to ensure the unique Mankind culture is restored. |
| Acute Segment Softness | Mankind’s heavy reliance on oral anti-infectives (60% of segment) makes it vulnerable to lower prescription volumes in the GP market compared to peers with higher injectable mixes. |
| Inventory & Primary Sales Gap | Notable mismatch between high secondary sales growth and lower primary sales in OTC. This is attributed to accounting for quick-commerce margins and the removal of certain stockists. |
Q&A Highlights
Restructuring and Growth Lag
- Question: Why is Mankind lagging behind IPM growth despite corrective actions? (Chintan Sheth)
- Answer: The transformation involved hiring 15-20% new field force and leadership. We overestimated the execution speed. Insecurity during layoffs led to good people leaving, but attrition is now down, and daily sales traction is improving (Rajeev Juneja).
BSV Performance
- Question: What is the specific revenue and growth for BSV? (Kunal Dhamesha/Neha Manpuria)
- Answer: BSV grew 20%+ YoY in Q3 with absolute revenue around ₹464 crores. 9M growth is in the early teens (Prakash Agarwal).
OTC Strategy
- Question: Why is primary growth in OTC (5.2%) much lower than secondary growth (33%)? (Kunal Dhamesha)
- Answer: We stopped the “cash and carry” business to improve hygiene and narrowed our stockist base. Additionally, higher sales through e-commerce/modern trade result in lower recognized revenue due to accounting for platform margins (Rajeev Juneja/Ashutosh Dhawan).
Therapy Outlook
- Question: Why is Anti-infective underperforming while Cardio is strong? (Kunal Randeria)
- Answer: Chronic (Cardio) prescriptions are “sticky”; once generated, they stay. Acute business is relationship-driven and requires daily reminders; the team rejig hit the GP/Acute segment harder as relationship continuity was broken (Rajeev Juneja).
Key Takeaway
Mankind Pharma reported a steady Q3 FY26 with 11.5% revenue growth, though margins were slightly compressed to 25.9% due to R&D and employee cost increases. The company is emerging from a significant 18-month internal transformation that overhauled 20% of its field force to pivot toward specialty and chronic therapies. While chronic segments outperformed the IPM (1.2x to 2.2x), the acute anti-infective segment remained a drag due to the loss of doctor relationships during the restructuring. Strategic focus is now on the BSV integration, which is yielding 20%+ growth, and the upcoming Day 1 launch of GLP-1 in March 2026. Management remains confident that as the new workforce matures and channel hygiene in OTC improves, the company will return to its historical trend of outperforming the IPM. Robust cash flows (93% EBITDA conversion) and aggressive debt reduction support this recovery phase.
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