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.

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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.”

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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