Mankind Pharma shares extend gain after solid listing; should you stay put or book profits?

Mankind Pharma made a solid debut at Dalal Street on Tuesday as the stock was listed at a premium of 20 per cent at Rs 1,300 on both BSE and NSE, against the issue price of Rs 1,080. The pharmaceutical player's listing was quite better than the expectations, delivering a strong listing pop.

However, the bullish momentum in the debutant counter continued even after listing as the stock advanced another 9 per cent to Rs 1,414 at 11.20 am, extending the overall gains to about 31 per cent over the issue price. Now, the investors are cautious if they should book the profits or exit the counter after the initial listing day gains.

Majority of the analysts suggest investors hold the stock for a long run, even as the stock delivered a strong performance during its maiden trading session. However, a few suggested to book profits and re-enter at the lower levels. Even prior to its listing, it attracted global brokerage firms which were positive on the stock suggesting a strong upside on the counter.

Mankind Pharma, the second-largest domestic pharma company in terms of volume, appears to be well positioned to double its PAT by FY26E, said Macquarie in its initiating coverage report.

"We believe continued sales outperformance to the India market, focus on chronic therapies and improved salesforce productivity are growth drivers," it added with an outperform rating on the stock. Its target price of Rs 1,400 was met during the trading session on Tuesday.

Mankind Pharma is a well-known and established pharmaceutical company that offers pharmaceuticals as well as several consumer healthcare products. The company has strong fundamentals and it is already attracting outperforming ratings from global brokerage Macquarie, said Santosh Meena, Head of Research, Swastika Investmart.

"Our recommendation for the IPO was to subscribe, and we maintain a bullish view of the stock, advising investors to hold it for the long term. However, investors who applied for listing gains may either choose to exit or hold it with a stop loss at the issue price," he added.

The IPO of India’s fourth largest pharmaceutical company received a strong response from the investors and was overall subscribed 15.32 times. The issue was open for subscription between April 25-27 in the price range of Rs 1,026-1,080 per share as the company raised 4,326 crore via its maiden offering.

The quota reserved for qualified institutional bidders was subscribed 49.16 times, while the portion for non-institutional bidders was booked 3.80 times. The allocation of retail investors was subscribed merely 92 per cent.

The primary market saw an IPO hitting after a long gap, thus the interest was high. Moreover, the healthcare sector was a laggard over the last one year but started seeing traction over the last two months as the monthly pharma data showed improvement, said Hemang Jani, Head of Equity Strategy, Motilal Oswal Financial Services.

"Thus Mankind Pharma received good response from its anchor clients given its domestic focused business with strong brand recall in both chronic and consumer healthcare segments. Given its healthy financial track record, domestic focus and extensive network, Mankind is likely to continue doing well," he said.

Incorporated in 1991, Mankind Pharma develops, manufactures, and markets pharmaceutical formulations across various acute and chronic therapeutic areas and several consumer healthcare products. It has over 36 brands across the segments Including anti-infectives, cardiovascular, gastrointestinal, anti-diabetic, well-being and respiratory.

"We would advise investors who have got allotment in the IPO to book profits on the opening day," said Prathamesh Masdekar, Research Analyst at Stoxbox. "Fundamentals of the company look good from a long-term perspective including domestic focus of the business, strong distribution network and good products at affordable prices, we would be comfortable for fresh entry at lower levels."

"At current prices the stock of Mankind Pharma is trading a TTM P/E multiple of 46.7 times. We see limited upside from here, thus investors are recommended to book profit and later enter at lower price, if available," said Rajnath Yadav, Senior Analyst at Choice Broking.

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