Mankind Pharma Navigates Q2 FY26 with Strong Revenue Growth Amidst Strategic Shifts

Mankind Pharma Limited, a prominent player in the Indian pharmaceutical sector, reported its financial performance for the second quarter and first half of fiscal year 2026, showcasing robust revenue growth driven by strategic acquisitions and core business strength. The company's overall revenue from operations surged by 20.8% year-on-year in Q2 FY26, reaching INR 3,697 crores. For the first half of the fiscal year, revenue increased by an impressive 22.6% year-on-year to INR 7,268 crores. This growth was primarily propelled by strong performance in chronic therapy segments and the consolidation of BSV Limited's results.

Despite the top-line expansion, the company experienced a decline in Profit After Tax (PAT), which fell by 21.3% year-on-year to INR 520 crores in Q2 FY26. This was mainly attributed to higher finance costs and increased depreciation expenses following the BSV consolidation. The reported EBITDA margin for the quarter stood at 25.0%, a decrease of 280 basis points year-on-year, influenced by higher R&D expenses, increased employee costs, and a slight reduction in gross margins due to discounts offered to stockists for new GST rates.

Segmental Performance: Chronic Strength vs. OTC Headwinds

Mankind Pharma's domestic business, excluding consumer healthcare, demonstrated solid growth of 16.1% year-on-year in Q2 FY26, contributing INR 2,958 crores. The chronic therapy portfolio continued its strong outperformance, with cardiac and anti-diabetic segments growing 1.3x and 1.2x respectively compared to the Indian Pharma Market (IPM). This consistent focus on chronic diseases has led to a 200 basis points increase in chronic share, reaching 37.1% in Q2 FY26.

Conversely, the Consumer Healthcare (OTC) segment faced challenges, with revenue declining by 2.6% year-on-year to INR 226 crores in Q2 FY26. This dip was largely due to supply chain disruptions caused by the rollout of new GST rates in September 2025 and adverse weather conditions (uneven monsoon). Despite this, key OTC brands like Manforce and Gas-o-fast continued to show healthy secondary sales growth of 14% and 36% year-on-year, respectively. The company anticipates a recovery in the OTC segment in the second half of FY26.

The Exports business emerged as a significant growth driver, registering an impressive 82.6% year-on-year increase in revenue to INR 513 crores in Q2 FY26. This surge was primarily due to the consolidation of BSV's international business and growth in Mankind's base export operations. The company has launched 3 new products in the US market in Q2 FY26, bringing the total launched products to 48.

Strategic Initiatives and Future Outlook

Mankind Pharma is actively pursuing several strategic initiatives to sustain its growth trajectory. The integration of BSV's super specialty portfolio is on track, aiming for long-term sustainable growth by focusing on high entry barrier complex products and niche offerings. The company is also expanding its presence in specialty and super specialty segments through both M&As and in-licensing agreements, such as with AstraZeneca for Symbicort and Novartis for Crenzlo.

To deepen market penetration, especially in metros and Tier I cities, Mankind Pharma is engaging Key Opinion Leaders (KOLs), forming hospital tie-ups, launching specialty divisions, and introducing DMF grade products. The company is also investing in digital platforms to enhance productivity and efficiency through AI/ML based technologies and strengthening its R&D capabilities, with R&D expenses maintained within the guided range of 2.5% to 3% of sales.

Management acknowledged that recent organizational transformations, including changes in the sales force, have temporarily impacted performance. However, they expressed confidence that these changes are foundational for long-term growth and expect performance to outpace the IPM by 1.1x to 1.2x in the second half of FY26. The company also maintains its EBITDA margin guidance of 25-26% for FY26, expecting to be at the lower end of this range.

Financial Health and Capital Allocation

Mankind Pharma's financial health remains robust, with cash flow from operations increasing by 44% year-on-year to INR 1,637 crores in H1 FY26. The company has prudently managed its debt, reducing its net debt position by INR 488 crores sequentially and fully retiring commercial papers worth INR 5,000 crores. The net debt to adjusted EBITDA ratio improved to 1.4x in Q2 FY26 on a trailing 12-month basis, with a target of 1.2x by March 31, 2026. Capex spend for Q2 FY26 was INR 163 crores, representing 4.4% of revenue, well within the guided range of 5%.

Concluding Thoughts: Building for the Future

Mankind Pharma is currently undergoing a significant transformation, strategically positioning itself for sustained long-term growth. While facing short-term pressures from internal restructuring and external market dynamics like GST changes, the company's core strengths in chronic therapies, robust export performance, and disciplined capital allocation provide a strong foundation. The management's candid acknowledgment of challenges and clear strategic roadmap for specialty expansion and R&D investment underscore a focused approach to building a resilient and leading pharmaceutical enterprise in India.