MANKIND Q2 FY26 earnings call.
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Revenue
₹3,697 Cr
verified against source
Revenue YoY
20.8%
reported change
EBITDA
₹924 Cr
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
Mankind Pharma reported Q2 FY26 revenue of ₹3,697 crore (+20.8% YoY), driven by BSV consolidation and base business growth. EBITDA came in at ₹924 crore with a 25% margin, down 80bps YoY due to higher R&D (100bps), employee costs (130bps), and GST-related stockist compensation. PAT declined 21.3% to ₹520 crore on higher finance and depreciation costs from BSV. Management admitted dissatisfaction with organic performance (6% domestic growth) citing sales force transformation disruptions, BSV integration, and GST disruptions as headwinds. Chronic portfolio now contributes 37.1% of sales (+200bps YoY) with 1.2x IPM outperformance in anti-diabetics and respiratory. Full-year EBITDA margin guidance maintained at 25-26% but at lower end. Management targets 1.1-1.2x IPM outperformance in H2, though this falls short of historical 1.3x+ performance. Key risks include execution uncertainty during the sales force transition and margin pressure from increased R&D investments.
Colored figures show movement against the previous available record.
Guidance to track
- Management maintained full-year EBITDA margin guidance but clarified they expect to end FY26 at the lower end of the 25-26% band, pressured by R&D investments and employee cost increases.
- Domestic BSV growth guided at 12-15%+ and international at 18-20%+, with blended target of 18% achievable. TTK Rx business has stabilized and is seeing high growth trajectory.
- R&D expenses for Q2 FY26 were at 2.9% of sales (₹109 crore) and will remain within the 2.5-3% guidance range for the full year, lower than 3%.
- Current net debt/EBITDA stands at 1.4x as of September 2025, down from 1.8x in March 2025, with target to reach 1.2-2.0x band by end of FY26.
Risks flagged
- Management admitted disappointment with organic domestic growth (6% vs historical 1.3x IPM outperformance). Sales force restructuring took longer than expected (12+ months vs 6-9 months targeted) as new representatives require time to build doctor relationships in tier 2-4 markets.
- EBITDA margin declined 80bps YoY to 25% in Q2, with management guiding to lower end of 25-26% for full year. R&D increased 100bps, employee costs up 130bps, and GST-related stockist compensation impacted gross margins.
- Analyst raised concern about chronic outperformance gap narrowing vs IPM over past several quarters. Management attributed this to price hike discipline (3.9% vs IPM 4.2%) and transformation disruptions, but acknowledged historical advantage may not sustain.
- OTC revenue declined 3% YoY due to GST disruption and uneven monsoons, with primary sales impacted more than secondary sales (Manforce +14%, Gopex +36%). Recovery in H2 is expected but uncertain.
Key quotes
- We are not happy with the performance. We maybe overexpected that it did not happen in 9-12 months time. Going forward things will be much better because we expected 6 to 9 months but it has taken more than that.
- We have always been a company which has outperformed IPM. If we are not good in that, we are not a good fast-growing organization. We believe that we are very good in that and future will tell that we are performing much better.
- This quarter has a bit of a bulge because the increment cycle starts from 1st of July and since it's the salary increases there is some impact. Headcount has also increased by 3-4% that has also contributed along with talent acquisition within the sales force.
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