Target: ₹3,300
CMP: ₹2,547.15
Mankind Pharma’s vision to be an innovation-driven and differentiation-focused with high entry barrier products has found a match in Bharat Serums and Vaccines (BSV). We believe BSV has the potential to drive growth for longer periods and BSV’s Specialty strengths (R&D and sourcing as moats) would further Mankind’s vision.
Mankind’s strong India presence/network would spur a significant uptick in BSV’s India sales given huge complementarity/synergies. Specifically, IVF is an underpenetrated and a large market ($6 billion) and MNKI-BSV has the potential to become a global leader. We believe Street underappreciates the ‘Special’ty/biz moat of BSV both in the near and longer term.
Under Mankind’s capable management, we believe BSV could scale new heights and potentially generate a $1 billion sales/35 per cent+EBITDAM by FY32 (>1,000 bps improvement).
The company’s deep market presence and a track-record of creating brands have led to a consistent outperformance vs industry. Its scale-up in chronic against the odds is commendable and it has room to expand. Its 16k+ strong sales force is the backbone of its marketing muscle.
We forecast 18 per cent EBITDA CAGR (FY24-FY27E), value Mankind Pharma @ 30xSep’26 proforma EBITDA and initiate with a Buy.