Mankind Pharma block deal: Stock may top Rs 2,500 level in short-term, qualify for MSCI May inclusion, says Nuvama

Shares of Mankind Pharma Ltd are in focus as an affiliate of private equity firm ChrysCapital, Beige Ltd, is likely to shed 2.90 per cent stake in the pharma major through block deals, as per a CNBC-TV18 report. Business Today could not independently verify the report. But if the report is true, Nuvama Alternative & Quantitative Research said the stock should automatically qualify for MSCI May 2024 inclusion for the May 24 review if the revised shareholding for the March quarter is reported on exchanges by April 16, 2024.

"We estimate the float to move to 25 per cent, making the stock safe to qualify above Rs 1,850 level at current global cut-off levels. The cut off levels are dynamic and changes on daily basis," Nuvama noted.

Nuvama Alternative & Quant Desk estimated a potential inflow of $156 million, equivalent to 5.million mn shares, with an impressive 15 days impact. "We believe the stock, with limited float available, should continue to do well and easily cross Rs 2,500 level in a short time," Nuvama said.

The stock closed at Rs 2,208.20 on Friday, up 3.46 per cent.

In the case of FTSE, Mankind Pharma is already a member of FTSE Index.

"According to Nuvama Alternative's calculations, the expected wt. up. inflow is around 10 mn (0.35 mn shares / 1 days impact). The wt. up should happen in next few days," said Abhilash Pagaria, Head – Nuvama Alternative & Quantitative Research.

Mankind Pharma deals in acute and chronic therapeutic areas including anti-infectives, cardiovascular, gastrointestinal, anti-diabetic, neuro/CNS, VMN and respiratory, among others, with a strategy to increase chronic presence going ahead. In the consumer healthcare business, the company operates in the condoms, pregnancy detection, emergency contraceptives, antacid powders, vitamin and mineral supplements and anti-acne preparations categories, among others, with several category-leading brands.

The company has 25 manufacturing facilities in India manufacturing a wide range of dosage forms, including tablets, capsules, syrups, vials, ampoules, blow fill seal, soft and hard gels, eye drops, creams, contraceptives and other over-the-counter products. Mankind has a consistent track record of product innovation through 4 dedicated R&D facilities backed by more than 600 scientists.

The company reported 55.5 per cent YoY jump in profit at Rs 460 crore for the December quarter on 24.7 per cent YoY rise in sales at Rs 2,607 crore. Ebitda grew 39.1 per cent to Rs 611 crore while Ebitda margin expanded 240 basis points to 23.40 per cent for the quarter.