Mankind Pharma shares plunge 5% on report of IT raid at company's Delhi offices

Shares of recent debutant Mankind Pharma took a beating, plunging over 5 per cent in Thursday's trade amid a media report, which quoting sources suggested that the Income Tax (I-T) department has conducted searches at Mankind Pharma's New Delhi offices. Sources told Zee Business that the action is likely to continue for 1-2 days.

Mankind Pharma derives 98 per cent of revenue from the domestic pharma market. Within its domestic business, 90 per cent of revenue comes from prescription pharmaceuticals and the rest from the consumer health business.

The stock, which got listed on May 9,  plunged 5.48 per cent in Thursday's trade to hit a low of Rs 1,306 on BSE. 

Another report by PTI suggested  the I-T department was conducting searches at Mankind’s Delhi and nearby locations, checking documents, and questioning people. 

Mankind Pharma had ended with gains of 31.7 per cent on its debut on Tuesday. After Thusrday’s fall, the maker of Manforce condoms commanded a market capitalisation of Rs 53,680 crore.

Mankind Pharma is engaged in developing, manufacturing and marketing a diverse range of pharmaceutical formulations 

The second-largest domestic pharma company in terms of volume appears to be well positioned to double its profit after tax by FY26, Macquarie said in its coverage initiation report earlier this week. The foreign brokerage said continued sales outperformance to the India market, focus on chronic therapies and improved salesforce productivity are growth drivers for the drug maker.

"It has one of the largest networks of medical representatives in India and over 80 per cent of doctors prescribe its products. We believe growth potential in the chronic segment would likely drive meaningful margin expansion from 22 per cent in FY23e to 28 per cent by FY26e, leading PAT to more than double (from Rs1,300 crore in FY23e to Rs 2,800 crore in FY26e)," Macquarie said.

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.

Also Watch: Adani Enterprises, other group shares rise after Mauritius minister rebuts Hindenburg allegations

Also read: Adani Enterprises shares jump 4% as Adani group flagship considers raising funds 

Also reaD: RVNL, IRCON International, YES Bank, Zomato shares rally amid high volumes; L&T, Dr Reddy's Labs log high turnovers