Mankind Pharma Stock Jumps 4.6% on News of Buying Bharat Serums and Vaccines

Stock Market Update:

Mankind Pharma’s share price surged by 4.6% to ₹2240.00 on the BSE this Friday, following the announcement of its plan to buy a 100% stake in Bharat Serums and Vaccines Limited (BSV). However, the stock gave up most of these gains as the day progressed.

Deal Details:

Mankind Pharma has entered into a definitive agreement to acquire BSV from Advent International, a key private equity investor. The deal is valued at approximately ₹13,630 crores, translating to a valuation of 23-24 times EV/EBITDA. EBITDA stands for Earnings Before Interest, Tax, Depreciation, and Amortization. The acquisition will be funded through a mix of internal accruals, debt, and equity, and is expected to be completed in 3-4 months.

Benefits of the Acquisition:

This acquisition will strengthen Mankind Pharma’s presence in the high-entry-barrier portfolio and help maintain its leadership in women’s health. Mankind Pharma is currently the top-ranked company in the gynecology segment of the Indian Pharma Market.

BSV’s Portfolio:

BSV’s domestic brand portfolio includes several large brands. One brand is valued at over ₹100 crores, three brands are valued between ₹50-100 crores, and eight brands are valued between ₹25-50 crores. BSV reported margins of 23% in FY24, adjusted for one-offs to 28%. Their revenues for FY24 stood at ₹1,723 crores, with 54% coming from the domestic market and 46% from branded international sales.

Mankind Pharma’s Financials:

For FY24, Mankind Pharma reported sales of ₹10,335 crores and an EBITDA of ₹2,550 crores, resulting in an EBITDA margin of 24.7%. The acquisition of BSV will expand Mankind’s brand portfolio to over 40 brands valued at more than ₹50 crores.