Expect EBITDA & Margin To Be Better By The End Of This Year: Mankind Pharma | CNBC TV18

Summary

Mankind Pharma's Q3 results were in line with expectations, showing stable revenues and margins but a decline in profits. The company has taken corrective actions across multiple areas, including leadership and marketing, to strengthen its internal operations. While growth in the acute and domestic formulations segment is muted, they anticipate better performance and margins in FY26. The integration of the BSV business, along with ongoing debt reduction strategies, is expected to bring further synergies and growth. Mankind Pharma remains focused on long-term growth, with improvements expected in Q4 and beyond.

Takeaways

• 😀 Q3 results were in line with expectations, with revenues and margins steady but a decline in profits after tax.
• 😀 Mankind Farma has been taking corrective actions over the past few quarters, which are now nearing completion (80-90% done).
• 😀 The company is focused on strengthening its internal operations rather than just external appearances, with significant efforts in leadership, finance, marketing, and field operations.
• 😀 Mankind's growth in the next year (FY26) is expected to be better, with improved margins and a positive outlook for key sectors.
• 😀 Analysts highlighted that core IPM (Indian Pharmaceutical Market) performance was significant despite one-offs affecting the topline.
• 😀 Corrective actions were taken across various business areas, including leadership changes and training initiatives to align with the company's long-term vision of becoming a super-specialty company.
• 😀 The company is optimistic that the results of these corrective actions will be visible by Q4 of the current year.
• 😀 The BSP (Business Specialty Products) business is expected to show flat growth for FY25, but 15% growth is anticipated for FY26, especially in exports.
• 😀 Mankind expects the margin performance of its BSP business to improve next year, particularly with the integration of the TTK business into the company.
• 😀 The company is aiming to reduce its net debt to EBITDA ratio to 2x by the end of FY26, with efforts such as paying off debt and potential asset divestitures.
• 😀 Despite some weakness in the domestic formulations business, Mankind remains focused on long-term growth and stability rather than short-term challenges.
• 😀 The company is confident about the integration of its newly acquired BSP business (acquired in October 2023), expecting synergies and positive developments in the coming quarters.

Q & A

What were Mankind Pharma's Q3 results like?

Mankind Pharma's Q3 results were in line with estimates, but there was a decline in profits during the quarter. The company's revenues and margins were as expected.

What corrective actions has Mankind Pharma taken?

Mankind Pharma has taken corrective actions in various areas, including finance, leadership, marketing, and operations. These actions were initiated to improve the company's internal strength and align with long-term goals.

When did Mankind Pharma start implementing corrective actions?

The company started implementing corrective actions around January to February of the previous year, and expects these changes to be 90% complete by the end of the current quarter.

What is Mankind Pharma's growth expectation for FY26?

Mankind Pharma expects growth in the range of 1.3 to 1.4 times in FY26, with better margins and improved performance compared to the current year.

What impact did the BSV business have on Mankind Pharma's financial results?

The BSV business impacted Mankind Pharma's top line, with analysts noting a significant contribution from the core IPM. However, some one-off factors affected the company's overall results.

What are Mankind Pharma's expectations for the BSV business in FY26?

For FY26, Mankind Pharma expects the BSV business to show overall growth, particularly from exports, while the domestic market may see a slight decline. The company anticipates a 15% growth rate from the BSV business.

What is Mankind Pharma's plan to reduce its debt-to-EBITDA ratio?

Mankind Pharma plans to reduce its debt-to-EBITDA ratio to 2x by the end of FY26. They are taking steps such as a QIP and divesting non-core businesses to achieve this goal.

How does Mankind Pharma view its leadership changes?

Mankind Pharma sees leadership changes as an essential part of their corrective actions. While leadership transitions can cause temporary disruptions, the company believes it strengthens the organization in the long run.

What is the company's outlook for the acute therapies segment?

Despite some weakness in the domestic formulations business, Mankind Pharma remains confident in the acute therapies segment. The company has made corrective actions, which it believes will improve the segment's performance in the long run.

What challenges has Mankind Pharma faced with the domestic formulations business?

Mankind Pharma has faced some weaknesses in the domestic formulations business, including issues with excess inventory, discounts, and temporary leadership transitions. However, the company is focusing on internal strength and long-term stability.