Morgan Stanley has initiated coverage on Mankind Pharma with an Overweight rating and set a target price of ₹2,500, implying an upside potential of 23% from the last closing price of ₹2,020.25 per share on the BSE. According to reports from The Economic Times, the international brokerage firm expects revenue to grow at a CAGR of around 11% between FY26 and FY28, while adjusted EPS is projected to see a stronger CAGR of about 25% over the same period. The brokerage sees the Indian pharmaceutical market expanding at 11% to 12% during FY26 to FY28 and prefers Mankind Pharma for its favourable risk-reward profile, noting its domestic focus helps insulate it from global pricing pressures.
The pharma major posted an 8% year-on-year rise in consolidated net profit, which stood at ₹414 crore in Q3FY26, compared with ₹385 crore in the same quarter last year. As reported by The Economic Times, revenue for the quarter grew 11.5% YoY to ₹3,567 crore, up from ₹3,199 crore in the corresponding period last year. On the operational front, domestic revenues rose 11.1% YoY to ₹3,046 crore, driven by steady growth in the base business and supported by consolidation of BSV. Export revenues increased 14.1% YoY to ₹521 crore, aided by strong performance in the international BSV business. The company reported an adjusted EBITDA margin of 25.9% and PAT margin stood at 11.6% during the quarter, with diluted EPS coming in at ₹9.9, registering a 6.7% YoY growth.
Growth is likely to be supported by a recovery in the domestic business, along with optionality from its BSV segment. According to The Economic Times, while domestic revenue growth remained healthy, secondary sales growth stood at 8.5% compared with IPM growth of 11.8%, largely due to underperformance in acute therapies amid ongoing corrective actions. The brokerage highlights BSV optionality as another key growth driver, referring to the upside potential from Mankind Pharma's speciality and complex business, which could provide incremental value beyond the underlying business. Ongoing recovery trends in the domestic market, especially in chronic therapies and branded generics, are also expected to be a key driver. The company's disciplined approach to capital allocation and growing product pipeline are additional positives supporting the brokerage's preference.
The share price of the company has shown positive momentum, with shares up by 1.95% ahead of market opening, trading at ₹2,059.70 compared to the previous closing price of ₹2,020.25, as reported by The Economic Times. This represents a recovery from the recent decline of 10% in the last one month and 18% in the last six months. The recent share price strength reflects improving market sentiment toward the company's fundamentals and growth prospects, though the company's fundamentals and growth prospects remain strong according to Morgan Stanley's analysis.
