Mankind Pharma Regain 6% As Company Says Impact of I-T Raids on Operational Performance

Mankind Pharma Share Price Today: Mankind Pharma’s shares bounced back 6 per cent in the intra-day trade on Friday as investors took cognisance of the company’s clarification on raids by the income tax department.

The pharma giant in a stock exchange filing that there will be no impact of the IT raids on its operational performance.

As the income tax department is conducting searches at some of Mankind Pharma’s premises/ plants over allegations of tax evasion, the pharma company informed the exchanges that they are cooperating with the officials, “The officials of the Company and its subsidiaries are cooperating with the officials of the Income Tax Department and are responding to the queries raised by them. This has had no impact on our operational performance,” Mankind Pharma said in a regulatory filing.

The IT Department carried out search operations in its Delhi and nearby office on alleged reports of tax evasion early on Thursday morning (May 11).

On Thursday, shares of the recently listed pharmaceutical company had tumbled over 5 per cent in the intra-day tarde after reports said the Income Tax Department was conducting searches at Mankind Pharma Ltd’s office in New Delhi.

Mankind Pharma, India’s fourth largest pharmaceutical company, had debuted on the bourses on Tuesday, May 9. Shares of the company had jumped more than 32 per cent during their stock market debut, thanks to a strong follow up demand from institutional investors. This was the best listing day performance of a stock in nearly six months.

Despite Thursday’s fall, the stock of the pharmaceutical company — popular for its Manforce brand of condoms and Prega News pregnancy test kit — is trading 31 per cent higher than its issue price of Rs 1,080 on the BSE.

Ahead of Mankind Pharma’s listing today, global brokerage Macquarie came out with an initiation report on the stock with an outperform rating and a target of Rs 1,400 apiece.

Macquarie noted that Mankind has a net cash of about Rs 280 crore as of December 2022 with strong cash flow generation. FY22 ROIC of 30 per cent and ROE of 26 per cent fare much better than its domestic peers (average ROIC of 17 per cent, ROE 16 per cent) and are in line with MNC peers such as Abbott, Pfizer, and GSK India.

That said, capacity utilisation remains low, suggesting room for improvement, Macquarie said.

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

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