Mankind Pharma sees 21% profit surge in Q2 despite consumer health hurdles

Mankind remains focused on transitioning more products from Rx to OTx and over the counter, aiming to launch multiple products with high growth potential.

Pharmaceuticals major Mankind Pharma reported a 21 per cent year-on-year (Y-o-Y) increase in net profit, with revenue rising by 12 per cent Y-o-Y in the second quarter of the financial year 2024 (Q2FY24) in a regulatory filing lrecently.

In an email interview with Business Standard, Rajeev Juneja, vice president and managing director of Mankind Pharma, tells Sanket Koul about the reasons behind the company’s muted growth in the consumer healthcare sector and its varying performance in the acute and chronic segments in Q2.

Why has Mankind faced muted growth in the Consumer Healthcare segment in the September quarter?

Mankind’s Consumer Healthcare segment faced muted growth in Q2FY24, recording a two per cent year-on-year increase to Rs 193 crore.

This was primarily due to inventory channel optimisation and the implementation of IT tools for stockist consolidation.

Despite this, key brands showed healthy performance across categories, maintaining market share with mid-teen growth in secondary sales.

Mankind remains focused on transitioning more products from Rx (prescription-based) to OTx (available both with and without prescription) and over the counter (OTC), aiming to launch multiple products with high growth potential.

With a dominant brand leadership position in various categories and a strong market share, the company anticipates sustained and substantial growth in this segment.

Has the delay in the acute season affected Mankind Pharma’s sales performance?

Yes, the delay in the acute season has affected Mankind Pharma’s sales performance.

While the company reported steady overall performance with revenue, EBITDA, and profit after tax (PAT) growing by 12 per cent, 15 per cent, and 21 per cent year-on-year, respectively, the delay in the acute season impacted its domestic business.

The delayed season not only affected anti-infectives but also related sub-therapies such as respiratory, cough and cold, gastro, and vitamins.

Mankind’s acute products contributed significantly to its sales (66 per cent), and the delay had an adverse effect on its quarterly performance.

What are the reasons behind the drop in secondary sales figures this quarter?

The decline in secondary sales volume growth to 4.6 per cent, in comparison to 0.3 per cent for the Indian Pharmaceutical Market (IPM), can be primarily attributed to the delayed acute season.

What are the reasons behind Mankind’s significantly lower capital expenditure (Capex) figures for H1FY24 compared to H1FY23?

There are multiple Capex projects which are carried out simultaneously.

Further, the lifecycle and the maturity profile of each Capex project differ.

The higher Capex incurred in the first half of the financial year 2023 (H1FY23) was mainly attributed to the setup of the Udaipur facility, which became operational during Q2FY24, along with other Capex projects.

What are the drivers behind Mankind outperforming IPM in the chronic segment this quarter?

In Q2FY24, the company’s performance in domestic operations and the consumer healthcare segment revealed notable factors behind its remarkable outperformance in the chronic segment.

The company adopted a focused approach in the chronic segment, which helped them achieve a 10 per cent growth, outperforming the IPM chronic growth by 1.1 times.

The chronic business segment saw robust growth, outperforming industry averages, indicating our focus towards chronic care to mitigate the impact of the delayed acute season.

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