Mankind Q1 FY27 Earnings Call Summary

Event Participants

Executives

5
Ashutosh Dhawan, Prakash Agarwal, Rajiv Juneja, Sheetal Arora, Sudipto Roy

Analysts

9
Binod Pathiparambil, Gaurav Bama, Kunal Dhamesha, Neha Manpuria, Pankaj Tibrewal, Rashmi Shetty, Ritika Agarwal, Shirish Savarma, Siddharth Nigande

Financials & KPIs

Geographic & Segment Commentary

• Domestic Business (India): Revenue of ₹3,426 crore, +10.5% YoY. Chronic grew 15.8% and acute recovered to 10.9% (vs 6.1% in Q1 FY26), now in line with IPM. Anti-infectives recovered from -1.1% in Q4 FY26 to +3.6%. Mankind retained the #1 prescription share at 15.2%.

• International Business: Revenue of ₹605 crore, +29% YoY. Growth driven by BSV international (+25%), US launches, and ~12-13% currency tailwind; the previously bulky ophthal one-off normalized into the base in FY25. High-teens constant-currency growth guided for the full year.

• Chronic Portfolio: Share (ex-BSV) up 80 bps YoY to 40%, targeting 50% in the medium term. Cardiac +19.4% (1.1x IPM), anti-diabetes +12.7% (1.1x IPM ex-tirzepatide). Glyzade +29%, Telmikind +21%, Lipirose +30%, Statpure +31%.

• Acute Portfolio: Gastro +13.6% (1.2x IPM; Pantoloc 1.8x outperformance), gynae +12.7% led by IVF (+39% in Foligraf and Humog), VMN +19.3%. Sequential recovery visible: gastro from -2.5% (Q2 FY26) to 13.6%, VMN from 5% to 19.3% over four quarters.

• Consumer Healthcare: Revenue of ₹246 crore; softer due to the corrective exit from discounted cash & carry. Market share gained in Manforce, Prega News, and Gas-O-Fast; modern trade/e-commerce share rose to 15% from 11% a year ago, supported by 38% channel growth.

• BSV: Q1 growth ~21% (domestic ~17%, international ~25%); FY26 domestic/international split ~50:50, similar range (±2%) expected this year. Gynae coverage expanded from 33,000 (FY25) to 37,000 doctors; IVF category coverage exceeds 80%, with category growth of 35%+.

Company-Specific & Strategic Commentary

• Chronic/Specialty Expansion: Chronic share (ex-BSV) rose 80 bps YoY to 40% of domestic business, with a stated medium-term target of 50% over the next 4-5 years. Launched new "Vistar" division to scale lesser-focused brands within existing divisions.

• GLP-1 Strategy: Deliberately avoided first-wave semaglutide launch amid 35+ competing brands and aggressive price erosion; positioned as a strategic "therapy-level" approach rather than caution. Semaglutide now launched in two divisions (anti-diabetes and gynae) with KOL-led promotion; no export strategy for this molecule.

• R&D & Innovation: R&D at 2.4% of sales (₹98 crore). Partnered with Denovo Science for AI-led drug discovery; acquired Roche's CNS brand Rivotril (~₹20-30 crore gross sales per IQVIA) to build specialist presence; enhanced BSV biotech R&D facility.

• Field Force Realignment: 18-month deep field-force correction (attrition and vacancies now back to normal levels) underpinning sequential recovery across acute therapies; prescription leadership maintained at 15.2% share.

• Capital Management: Net debt reduced to ₹3,377 crore (0.9x net debt/adjusted EBITDA); NCD tranche repaid in Q1; acquisition-related debt on track for full repayment by FY28. CapEx at 4.9% of revenue, below FY27 guidance of 6%-7%.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

India Growth vs IPM Outperformance

• Question: With the 1.2-1.3x IPM ambition, can we expect consistent outperformance in the remaining nine months? (Pankaj Tibrewal — Ikigai Asset Managers)
• Answer: Management stated Mankind has returned to double-digit growth with better quality — chronic +15.8%, acute recovered to 10.9%, volume growth improved to 4.7% (vs 2.3% in FY26). Structural levers cited: chronic mix from 40% toward 50% over 4-5 years, under-penetrated hospital business, new Vistar focus division, and under-penetrated states. (Management)

BSV Growth Composition

• Question: How should domestic vs export split of BSV be modeled? (Pankaj Tibrewal)
• Answer: Management corrected that FY26 BSV growth was early teens (not mid-single digits); Q1 FY27 growth ~21%, split domestic ~17% and international ~25%. FY27 guidance is high-teens. FY26 domestic/international split was 50:50; similar range (±2%) expected this year. (Management)

Working Capital & Gross Margin Trajectory

• Question: Will inventory-driven working capital normalize by year-end, and what drove the build-up? (Rashmi Shetty — Daulat Capital)
• Answer: CFO stated inventory was slightly above normal trends and rationalization is expected in coming quarters. Comfortable inventory meant price increases had not yet flowed through — Q2 may see gross margin compression from commodity/dollar movement; FY27 guidance maintained at gross margin >71% and EBITDA 25.5%-26.5%. (Ashutosh Dhawan)

Consumer Healthcare Corrective Actions

• Question: What exactly was done on cash & carry, and how should we read the ~3.8% CHC growth? (Rashmi Shetty)
• Answer: Rajiv Juneja said discounted cash & carry was impacting general trade, so it was stopped; the overall market was softer, but Manforce, Prega News, and Gas-O-Fast all gained share, and modern trade/e-commerce rose to 15% share from 11% on 38% channel growth. CHC guided to high single-digit to double-digit growth from Q2 onwards. (Rajiv Juneja)

Cash EPS Definition

• Question: Does cash EPS strip only acquisition-related amortization or full D&A? (Kunal Dhamesha — Macquarie)
• Answer: CFO clarified cash EPS is after full depreciation, amortization, and impairment — the cash portion of reported EPS. Total D&A is ~₹225 crore, of which ~50% is acquisition-related; a detailed reconciliation would be shared offline. (Ashutosh Dhawan)

Anti-Diabetes Covered Market Expansion

• Question: Has Mankind's covered market shrunk, explaining the IPM growth gap? (Kunal Dhamesha)
• Answer: In anti-diabetes, covered market expanded from 56% (FY21) to 74% (FY26), rank improved to #7 with 4.5% share, driven by insulin, DPP4, and SGLT2 launches; excluding tirzepatide, Mankind outperformed the segment 1.1x. However, overall NI contribution was 2.8% vs IPM's 4.1% (which includes GLP-1s) — a stated contributor to the growth differential. (Management)

GLP-1 Semaglutide Strategy

• Question: Given launch aggressiveness historically, why the cautious stance on GLP-1, and what changed from the earlier first-wave plan? (Kunal Dhamesha; Ritika Agarwal — ValueQuest)
• Answer: Rajiv Juneja said with 35+ brands and intense price competition, the company chose a strategic approach — let the storm pass and launch as a therapy rather than a single molecule; focus had also been on correcting company attrition. Management added semaglutide is launched in two divisions (anti-diabetes and gynae) with KOL-led promotion, is not a price-war play, and has no export strategy. (Rajiv Juneja; Management)

New Launch Momentum

• Question: With MR changes normalizing, should launch momentum and NI contribution improve? (Neha Manpuria — Bank of America)
• Answer: Management said launches are now strategic and selective — each launched brand is built to scale, e.g., vonoprazan (Vonalong) is #1 in its category and empagliflozin is among the top-3 new launch brands. (Management)

Rivotril Acquisition & CNS Entry

• Question: How large is Rivotril and what is its potential? (Binod Pathiparambil — Elara)
• Answer: Rivotril has ~₹20-30 crore gross sales per IQVIA; it provides entry to specialist doctors as a textbook CNS brand, with aspiration to build a strong CNS portfolio over time. (Management)

Recovery Evidence Post-Realignment

• Question: What hard metrics show the reorganization is working, and where does attrition stand? (Siddharth Nigande)
• Answer: Sequential therapy recoveries cited: gastro from -2.5% (Q2 FY26) to 13.6% (Q1 FY27); VMN 5% → 19.3%; gynae 6.9% → 12.7%; ophthalmology 6.2% → 17.5%; acute overall from 3.3% to 10.9% (at par with IPM); chronic from 12.2% to 15.8%; total company growth from 6.3% to 12.7%. Attrition and vacancies are now back to normal levels after 18 months of realignment. (Management)

International/US Growth Drivers

• Question: Is export strength one-off or sustainable, and what is the US/BSV contribution? (Rashmi Shetty)
• Answer: BSV international grew ~25%; the US did well with a couple of launches; currency contributed ~12-13%. Combined, it is in line with high-teens constant-currency guidance. The earlier bulky ophthal product normalized into the base in FY25. (Management)

Key Takeaway

Mankind Pharma opened FY27 with revenue of ₹4,031 crore (+12.9% YoY), EBITDA margin expanding 250 bps to 26.3%, and PAT of ₹574 crore (+29.1% YoY), despite a structurally higher 25.4% effective tax rate. Domestic business grew 10.5% with chronic at +15.8% and acute recovering to IPM parity (10.9%); international grew 29% to ₹605 crore on BSV strength. Management reaffirmed FY27 guidance of EBITDA margin 25.5%-26.5% and gross margin >71%, with Q2 input-cost pressure from the West Asia crisis flagged as the key caveat. Strategy centers on lifting chronic share from 40% toward 50% over 4-5 years, scaling the new Vistar division, selective high-value launches (semaglutide now live in two divisions, Rivotril for CNS entry), and deleveraging to 0.9x net debt/EBITDA with acquisition debt cleared by FY28. Key watch items include inventory normalization (working capital 52 days), cash conversion at 77%, and new-launch contribution still lagging IPM at 2.8% vs 4.1%.