Mankind Pharma IPO: Bullish Macquarie Sets ₹1,400 Target


Global brokerage Macquarie has initiated coverage on Mankind Pharma’s stock with an ‘outperform’ rating and a target price of ₹1,400 per share ahead of its listing today.

What Happened? Macquarie, citing continued sales outperformance in the Indian market, a focus on chronic therapies, and improved salesforce productivity as growth drivers, believes that Mankind Pharma, the second-largest domestic pharma company by volume, is well-positioned to double its profit after tax by 2026.

As noted in a Business Today report, the brokerage pointed out that Mankind has net cash of approximately ₹280 crore as of December 2022, along with strong cash flow generation.

Its 2022 fiscal return on invested capital (ROIC) of 30% and ROE of 26% outperform domestic peers and align with MNC peers such as Abbott, Pfizer, and GSK India. However, Macquarie noted that capacity utilization remains low, indicating room for improvement.

See also: Powering Up For IPO: India’s Largest Wire Exporter Seeks SEBI Approval To Raise Funds

The brokerage stated, “At the upper band of its IPO price of ₹1,080, the stock is valued at 19 times PER on our FY25e EPS of ₹56. Our target price of ₹1,400 is based on 25 times FY25e PER, at a 20% discount to MNC peers to account for innovative product launch optionality with MNC companies. We initiate coverage with an Outperform rating.”

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Mankind Pharma’s IPO which was open from April 25 to April 27 with a ₹1,026-1,080 price band, was subscribed 15.32 times. Of this, qualified institutional bidders’ quota received 49.16 times the subscription, while non-institutional bidders’ portion saw 3.80 times. Retail investors’ allocation was subscribed at 92%.

Price Action: Mankind’s share price was up 28.89% from its IPO price to trade at ₹1,392 in the early hours of trading on Tuesday.

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Posted In: NewsIPOsIPOMankind Pharma