A Force To Reckon With

Mankind Pharma, the fourth biggest player in the domestic pharmaceutical market rang the stock exchanges bell in early May this year, since then the company’s stock has been the north star rising over 23 per cent in less than four months from its listing price. The company posted handsome results for FY23 and for quarter one of FY24 with revenues rising by 12.4 per cent to Rs 8,749 crore and by 18 per cent to Rs 2,579 crore respectively. The company’s 97 per cent of revenues are generated within India.

Speaking exclusively to BW Businessworld, Rajeev Juneja, Vice Chairman and Managing Director, Mankind Pharma says the company is not focused on stock market but the attention is always on the company’s long-term growth which will keep its stock healthy.

“We should be the most admired and respected company. Our ambition is to become an institution which is loved by its consumers and the rest of the metrics such as the stock market and valuation will always be a by-product,” Juneja states.

Growth In The Indian Pharma Market

Juneja believes that the Indian pharmaceutical market will be growing by 7-9 per cent in FY24. He says this growth will be mainly due to the changing epidemiology of disease patterns with rising chronic diseases. This, he states, is being caused by sedentary lifestyles, stressful times, rising air pollution and the post-Covid effects on the body which are still being probed. “The population of India is also increasing, hence consumption of medicines will keep on rising,” the MD highlights.

As regards growth in FY24, he says Mankind will surely witness a double-digit growth, “We have always grown faster than the domestic market. Mankind focuses on value as well as on volume. Whatever happens our volume growth is inevitable. The reason is our deepest penetration with doctors – we cover more than 4 lakh doctors in every nook and corner of the country and our forecasting is never short-term but always long-term,” the Vice Chairman delineates.

He says that the company is confident that in the medium-term, its earnings before interest tax depreciation and amortisation (EBITDA) margins will bounce back in the range of 24 per cent to 26 per cent even as its growth sustains to be at 1.3 to 1.4 times the Indian pharmaceutical market’s growth.

Portfolio Expansion

From 2019 onwards, Mankind has opened 18 new divisions with a new office in Mumbai to run these specialised divisions – this shift in the business expansion is credited to the shift of the industry towards lifestyle diseases drugs. The company now has a very balanced portfolio of drugs evenly distributed among anti-infectives, cardiovascular, gastrointestinal, gynaecology, dermatology and others.

“Out of the total 28 divisions, 18 have been launched in the last couple of years. We added oncology, respiratory, neurocircuitry, anti-diabetic, hypertension and transplant business through the acquisition of Panacea Biotec, among others,” Juneja informs.

Apart from the expansion Juneja says that the company’s traditional policy and philosophy of deepest coverage of doctors from rural to urban areas will continue and will be largely run by the company’s Delhi office.

Mankind is planning to penetrate and educate the doctors sitting in tier-two and tier-three cities while using its corporate branding to expand in tier-one cities for the next phase of growth. Juneja says that family physicians or the MBBS doctors’ need to be given the confidence that they can treat lifestyle diseases as well. The company is providing online courses to educate the doctors on treatments for lifestyle diseases, Juneja informs.

Investments in Business

Mankind’s future investments will be largely taking place in infrastructure expansion, Juneja says that this means the company will continue to invest in new divisions and manpower while striving to enhance its production. “Mankind is a very uniquely placed company where 75 per cent products are manufactured in-house within our units and our subsidiaries. Because for many years, people used to say that Mankind sells economical products so the focus would not be on quality. People also said that we are a marketing company, we took those remarks to heart and expanded our own manufacturing to set up 25 units in the country and today our products never fail.”

Big On DMF APIs

Juneja says the top 10 pharma companies in India manufacture in-house when they export to developed markets but when they sell in India it's mostly the third-party manufacturing and that's where he says Mankind is different. “We are putting drug master file (DMF) grade raw material in our products. When you export any medicine to developed countries, the

regulators approve only DMF grade active pharmaceutical ingredients (APIs) which are of the highest quality of more than 99 per cent. But in India, this can be 97 per cent, 98 per cent or it can be anything,” Juneja explains.

Mankind has launched 120 DMF grade APIs at economical prices in India in the last couple of months. “In the next two to three months this number will be 150 and hopefully in six months we will cross 200 DMF grade APIs with a single aim of giving world-class quality medicine to Indian citizens as their counterparts get in the developed countries,” Juneja concurs.

He adds that giving the best quality medicines to everyone in India is still a challenge for the pharmaceutical industry in India – this is due to inadequate regulation of thousands of factories in the country by the regulatory bodies, he believes.

New Drugs In Pipeline

Mankind is presently working on a number of new products, “The company is working on a new molecule for the anti-diabetic therapy area. The code name is GPR119 and the molecule is currently in its phase three trials. We believe this will be a very promising drug. We are also working on biosimilars for oncology and anti-allergics and autoimmune disease products which are in phase one trials presently,” the MD reveals.

The company’s spend on R&D will remain unchanged to 2 to 2.5 per cent of its revenues in FY24, informed Juneja. A figure which is much lower than the industry average of 6 to 7 per cent. Juneja says the company is very young in its R&D operations which was set up only 13 years back and going forward the company is exploring every opportunity to move strategically on R&D investment.