On Thursday, Mankind Pharma Ltd (MANKIND:IN) received a Buy rating from Motilal Oswal Securities, with the firm setting a price target of INR2,650.00 for the pharmaceutical company. The new coverage is optimistic about the company's financial prospects, anticipating a 16% earnings compound annual growth rate (CAGR) from the fiscal year 2024 to 2027. This growth expectation is supported by a projected 12% sales CAGR and a 270 basis point margin expansion over the same period.
The positive outlook is based on several factors that are expected to contribute to Mankind Pharma's growth. These include the expansion of product offerings in major therapies and the company's ability to capitalize on leverage. Additionally, there is an anticipated gradual increase in the share of chronic therapies and a strategy to grow more brands to reach INR500 million to INR1 billion in size.
Improvements in medical representative productivity and the company's strategic expansion in metro and Tier-I cities are also seen as key drivers for Mankind Pharma's future performance. The firm has decided to assign a multiple of 40x on 12-month forward earnings to Mankind Pharma, which is a 30% premium compared to the pharmaceutical sector's valuation of 31x on a 12-month forward basis.
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