Ladies and gentlemen, good day and welcome to the Mankind Pharma Q2 and H1 FY26 results conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Abhishek Agarwal from Mankind Pharma, Head of Investor Relations, AVP Strategy. Thank you, and over to you, sir.
Good evening and a very warm welcome to our second quarter in H1 FY26 earnings call. On call today, we have Mr. Rajeev Juneja, our Vice Chairman and Managing Director, Mr. Sheetal Arora, Chief Executive Officer and Whole Time Director, Mr. Arjun Juneja, Chief Operating Officer, Mr. Sudipto Roy, Senior President, Sales and Marketing, Mr. Ashutosh Dhawan, Global Chief Financial Officer, and Mr. Prakash Agarwal, President, Strategy. We will begin with Rajeev Juneja, sir, providing an overview of quarterly performance, followed by detailed business insights from Sheetal Arora. Mr. Ashutosh Dhawan will then share the financial highlights, after which we will move on to the Q&A session. Please note that certain statements made during the call may be forward-looking, reflecting management's current expectations about future performance. These involve inherent risks and uncertainties, and actual results may vary. Mankind does not commit to updating these statements in light of future developments. For a detailed disclaimer, please refer to the investor presentation uploaded on our website. Now, I'll hand over to Rajeev, sir, for his comments.
Thank you, Abhishek, and good evening, everyone. A very warm welcome to our Quarter 2 and H1 2026 earnings call. In Quarter 2, our overall revenue increased 21% year-on-year to INR 3,697 crore, with EBITDA margin of 25%. In H1 2026, revenue increased by 23% year-on-year to INR 7,268 crore, with EBITDA margin of 24.4%. Our domestic business grew by 15% year-on-year by continued outperformance in chronic and BSV consolidation, partially impacted due to supply chain disruption led by new GST rates rollout. In Quarter 2 2026, our secondary sales increased by 6.3% year-on-year, which was lower as compared to 7.2% IPM growth. We believe GST impact was higher for us as compared to IPM due to our stronger presence in Tier 2 through Tier 6 cities and a higher share of acute business. While GST-related changes in September 2025 caused a brief disruption, we expect growth recovery in H2.
GST-2 deeply resonates with our own belief in providing high-quality, affordable medicines accessible to all and will pave the way for a more sustainable and inclusive future for the Indian pharmaceutical industry. Our chronic share further increased by 200 basis points year-on-year to 37.1% in Quarter 2, as compared to 35.1% in Quarter 2 last year, driven by continued outperformance of 1.3 times in cardiac and 1.2x in antidiabetics. Our consistent outperformance in antidiabetic in the last couple of quarters has improved our covered market rank from 5th to 4th during the quarter. We also saw 1.2x outperformance versus IPM in respiratory. Our inhaler brands, Symbicort and Combival, are one of the fastest-growing brands in the segment. We are scaling digital capabilities across the organization to create a more connected and agile enterprise.
Our partnership with OpenAI marks a new era of digital transformation, helping us make faster, smarter, and insight-led decisions to enhance performance and profitability. R&D expenses increased from 1.9% of sales in Quarter 2, 2025 to 2.9% of sales in Quarter 2, 2026, in line with our guidance of 2.5%-3% in year 2026. We remain committed to deliver innovative, science-backed products at affordable prices, ensuring access across the country and driving sustainable long-term growth. I now invite Sheetal to provide more details to our business performance.
Good evening and welcome to our Quarter 2 and H1 Financial Year 2026 earnings call. We appreciate your time and participation today. Let us begin with our domestic business performance. Revenue from domestic business increased by 15% year-on-year basis to INR 3,184 crore in Quarter 2, Financial Year 2026, supported by BSV consolidation. Organic domestic growth was around 6% year-on-year and 6% excluding OTC for this quarter. In H1 Financial Year 2026, revenue from domestic business increased by 17% to INR 6,285 crore. Organic growth for domestic, excluding OTC, was around 8% year-on-year. We continue to be the leading player with the highest prescription share of 15.3%, reflecting the trust that doctors have on Mankind and our products' deeper market reach. Additionally, our prescriber penetration has also improved by 30 basis points, increasing from 83.9% in May-September 2024 to 84.2% in May-September 2025.
Mankind's PCPM has improved to 7 lakhs as of September 30, 2025, from 6.8 lakhs as of March 31, 2025, on TTM basis. Our focused efforts over the past few quarters to build a strong foundation resulted in 1.7 times volume outperformance versus the IPM during H1 Financial Year 2026. From here on, we expect to deliver continued outperformance versus IPM. BSV's domestic specialty business has picked up momentum, with double-digit sequential growth led by mandate brands. PCPM of BSV's specialty business improved to 12.6 lakhs as of September 30, 2025, from 11.1 lakhs as of March 31, 2025, on TTM basis. Regarding our OTC business, during the quarter, revenue from OTC business declined by 3% year-on-year to INR 226 crore due to supply chain disruption led by new GST rates and some impact by uneven monsoons. We expect recovery in H2.
However t he secondary sales of our key brands, including Manforce and Gas-O-Fast, continue to witness a healthy growth of 14% and 36% year-on-year basis. Our modern trade and e-commerce shares have further expanded to 12% in H1 Financial Year 2026 versus 8% for the same period last year. Our export revenue during the quarter increased by 83% year-on-year to INR 513 crore in Quarter 2, Financial Year 2026, led by an increase in our base business and BSV consolidation. The organic growth during the quarter was single-digit. In H1 Financial Year 2026, revenue from exports increased by 82% to INR 982 crore. We are deeply committed to fostering a public-centric culture, and hence we have launched Mankind University, a self-paced, AI-powered virtual learning platform designed to meet our organizational needs and strengthen our foundation for future-ready and sustainable growth. Now, I will hand over to Ashutosh Ji, who will provide detailed insight on financials. Thank you so much.
Sure. Thank you, Sheetal Ji. Good evening, everyone. I am delighted to have you all with us on our Quarter 2 H1 FY26 earnings call. Let me give you a brief of the financial highlights for our quarterly performance for Quarter 2, FY26. Our revenue from operations during Quarter 2, FY26, has increased by 20.8% year-on-year basis to INR 3,697 crore as compared to INR 3,061 crore in Quarter 2, FY25. Which is driven by growth in our base business and consolidation of BSV results. Our gross margin for the quarter declined by 20 basis points year-on-year basis to 71.3% from 71.5% in Quarter 2, FY25, which is primarily due to the discount given to stockists to compensate them for the goods tax credit accumulation under new GST-2 rollout in September 2025. During the quarter, our reported EBITDA has increased to INR 924 crore from INR
850 crore, which results in a growth of 8.7% year-on-year basis. The reported EBITDA margin for the quarter is 25%, which has decreased by 280 basis points on a year-on-year basis. This decline is primarily driven by an increase in R&D expenses by 100 basis points, employee costs by 130 basis points, and the balance is a combination of gross margin and other expenses. The adjusted EBITDA margin for H1 FY26 is 24.4%, which has decreased by 200 basis points year-on-year basis. This decline is primarily due to a reduction in gross margin by 70 basis points, an increase in R&D expenses by 80 basis points, and the balance is due to an increase in employee cost. The R&D expenses for the quarter were INR 109 crore, which is at 2.9% of sales, and the same is higher than the R&D spend of 1.9% of sales during Quarter 2, FY25.
The R&D expenses for the Quarter 2, FY26, remain within the range of 2.5%-3% of our guidance. The finance cost for Q2, FY26 is INR 170 crore, which is in line with the finance cost of INR 171 crore during Quarter 1, FY26. Following the quarter end, we have fully retired the commercial papers worth INR 5,000 crore, with the last tranche worth INR 1,500 crore, which has been paid in October 2025. The net debt position has shown a decrease of INR 48 crore between the current quarter and the previous quarter in Quarter 2, FY26. The depreciation and amortization expenses have increased to INR 222 crore as compared to INR 100 crore in Quarter 2, FY25, which is primarily driven by depreciation and amortization impact related to BSV assets.
The current quarter depreciation and amortization expense is in line with the previous quarter expense, which was at INR 219 crore. The effective tax rate for H1 FY26 was at 17.1%, which has reduced from 20.7% in H1 FY25. The drop in ETR percentage is primarily due to higher exemption on account of goods being manufactured at Sikkim plant. The profit after tax for Quarter 2, FY26, has decreased by 21.3% year-on-year basis to INR 520 crore on account of higher finance costs and depreciation costs pursuant to BSV consolidation, with diluted EPS of INR 12.4 per share of INR 1 pay. During the quarter, cash EPS, which is EPS adjusted for non-cash items like depreciation and amortization, has increased to INR 17.7 from INR 15.9 in Quarter 1, FY26, and an increase of 11.6%.
The net operating working capital days for the quarter on a trailing 12-month basis have decreased to 46 days as compared to 48 days in Quarter 1, FY 2026. In H1 FY 2026, our cash flow from operations has increased to INR 1,637 crore as compared to INR 1,139 crore in H1 FY 2025, which is on a year-on-year basis an increase of 44%. This is primarily on account of the consolidation of BSV operating cash flows and growth in the organic business. Therefore, in H1 FY 2026, our CFO to EBITDA ratio has increased to 92% as compared to 75% in H1 FY 2025. Our capex during the quarter has increased to INR 163 crore in Quarter 2, FY 2026, as compared to INR 128 crore in Quarter 2, FY 2025. The capex as a percentage of revenue is 4.4% for the current quarter, which is within our guidance of 5% of revenue for FY 2026.
In line with our prudent financial strategy, we continue to strengthen our balance sheet and have reduced our net debt to INR 4,791 crore as of 30 September 2025, resulting in the net debt to adjusted EBITDA ratio of 1.4x in Quarter 2, FY26, on a trailing 12-month basis, which has improved as compared to net debt to adjusted EBITDA ratio of 1.8x as on 31 March 2025. We continue to maintain our guidance of 1.2x as on 31 March 2026. With this, we conclude our financial update and welcome any questions which you may have. Over to you, Abhishek.
Yeah, request coordinator to open the Q&A forum.
Sure, sir. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. I repeat, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone phone. If you wish to remove yourself from the question queue, you may press star and two. The first question comes from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead.
Sir, firstly on the bookkeeping side, while you have mentioned domestic formulation growth on an organic basis, can you also share exports growth on an organic basis?
Tushar, you are looking for exports on an organic basis? Your voice was muffled. Reconfirm, please.
Yes, yes, yes.
Right. In the last quarter, we had said it is single digit, mid-single digit. This quarter also, it's mid-single digit. On one-h basis, it is mid-single digit.
Understood.
For modeling purpose, you can take 5%.
Got it. Now that more or less half of 2026 into BSV, measures in terms of consolidating as well as coming under the Mankind umbrella, can you share how do we see the growth prospects on BSV portfolio?
Yeah, sure. If you see, BSV continues to show improvement on a sequential basis. We have seen double-digit growth on a Q&Q basis, both in India domestic specialty business as well as international business. YOY is still a high single-digit growth, but we expect higher growth in the second half, and we maintain our full-year guidance of 18%-20% growth for BSV. Do not forget, Q3, Q4 had some teething issues in terms of BSV operations because the M&A was going on, and the sales were much softer. We have seen business normalizing from Q1 to Q2 with the sequential double-digit growth, and that we will continue to see in the second half.
Got it. On the inhaler side also, we have seen very decent growth of almost 28%. How do we see the growth?
Voice is not clear, sir. Tushar, can you repeat it?
Is this better?
Yes, better.
So sorry.
Yes, it's better.
Yes. On the inhaler side also, we have seen very decent growth post making inroads into Combival and Symbicort. How do we see this growth panning out over the next two to three years?
We have seen very positive response of these products from AstraZeneca as well as the Combival that we took from another domestic company. Our doctor coverage has increased. We are seeing good traction among the respiratory specialists. The season is coming. We expect growth momentum to continue.
Got it. That's it from my side. Thank you.
Thank you. A reminder to all our participants, if you wish to register for questions, you may press star and one on your touchstone phone. The next question comes from the line of Neha Manpuria from Bank of America. Please go ahead.
Thanks for taking my question. My first question is on the organic India business. After the GST disruption that we've seen in this quarter, you mentioned that we can expect recovery in the second half. On an ongoing basis, when you say outperformance to IPM, should we assume double-digit growth as doable for Mankind in the domestic formulation business?
Neha, I'm sorry, Neha. Let me be very, very candid with you and everybody here that we are not happy with our own performance. The kind of expectations we were having, we expected when we started bringing transformation in Mankind. Maybe in the last call and last, last call, we mentioned that we brought a lot of transformation in Mankind in terms of number of people. Since Mankind is a kind of a company which is basically very strong in tier two, tier three, tier four kind of places, acute heavy, dependent on people, and we brought a lot of changes in people, and we thought that we will be able to replace, train, make them as good as the older people, those who had fantastic relationship. We maybe overexpected that. It did not happen in 9, 12 months' time. Whatever has happened has happened.
Going forward, things will be much, much better because we expected six to nine months, but it has taken more than that. One. The second basically is what? At the same time, we bought BSV. Third, we brought a lot of transformation in OTC side as well. All in all, there was a lot of transformation happening in Mankind in all three places. Maybe we overexpected, did not happen. Very honestly, we are not happy with our own performance and feel that going forward, we will be performing much better than what we have performed right now. Mankind has always believed that. Mankind is famous for our endeavor has always been always outperforming the IPM. If we are not good in that, we are not a good fast-growing kind of organization. We believe that we are very good in that. The future will tell that w e are performing much better.
Understood, sir. In that context, should I assume that, let's say, our path of outperformance to IPM would therefore probably take a couple of more quarters? It's not something that we should expect, let's say, in third quarter or fourth quarter. Is that how I should read your commentary?
Third quarter and fourth quarter, we expect that the performance will start outperforming the IPM, say 1.1x to 1.2x. Right now, we are in a very conservative mode. We do not want to order something which basically we are unable to really fulfill. We have always been a kind of a company which has over-delivered. We are just looking at everything very minutely and working on that. Because what basically happens, this kind of situation comes in once in a while in every organization when a company wants to transform itself. We feel that this is that period for Mankind. This all has been done keeping only long-term in mind. Incidentally, BSV also happened. Coincidentally, we were working on our consumer division as well. All things happen together. In one go, things are taking a lot of changes, have taken changes in Mankind. Not to forget, September GST also happened.
Yeah, fair enough. So BSV, Prakash, you mentioned. The 18%-20% growth. Continued. If I look at slightly, given there's disruption in the second half, your base is fairly low. If I were to look at FY2728, given we have been running BSV for a year now, how should we think about growth FY2728? Should it be low teens, mid teens, or can we still grow 18%-20% given the potential in the business?
There are a lot of strategic initiatives going on in BSV as we speak. In the last 12 months, we spoke about adding up facility. We spoke about adding up R&D lab. We spoke about having some senior leadership in the domestic business. I think it is now picking up momentum. However, having said that, we'll come back at the end of the Q4 in terms of proper guidance. I mean, double-digit, we should definitely get it, but exact guidance we'll be able to give at the end of the fourth Q.
Understood. Last question, if I may, on the employee cost, it seems higher in this quarter. Ashutosh sir, is there anything one-off sitting there, or is this the base we should assume? What led to the higher employee cost in the quarter on a sequential basis?
Basically, yeah, Neha, this is Ashutosh. Basically, our employee cost has increased year-on-year basis by close to 2.8%. It's a combination of three, four things. One is this quarter has a bit of a bulge because the increment cycle starts from first of July. Since the salary increases, there is some impact on the retirement benefits also. That's one. Even on a year-on-year basis, headcount has also increased by 3%-4%. That has also contributed to the increase in the headcount. As Rajeev Ji has also highlighted, we have gone through the restructuring and the talent upgradation within the salesforce. That has also contributed to the increase in the average salary cost. It's a sum total of these three things. That's why on a year-on-year basis, the employee cost is looking on a higher side.
Okay. Understood. R&D, you mentioned would be 2.5%-3%, right? That's the full-year guidance that you are maintaining?
On a year-on-year basis, 3%-4% headcount increase is there.
No, sir. I'm asking for R&D. What would be the guidance for full year?
R&D guidance we continue to maintain. It will be in the range of 2.5%-3%. It will be lower than 3% the R&D spend.
Got it. Thank you so much, sir.
Thank you. Before we take the next question, we would like to remind our participants that you may press star and one to register for your questions. The next question comes from the line of Kunal Dharmesha from Macquarie Group. Please go ahead.
Hi. Good evening and thank you for the opportunity. As of now, where do we stand in terms of the BSV guidance for FY 2026? I think earlier we had guided for export growth of kind of high teens to 20% plus. Where do we stand on the export as well as the domestic piece on BSV for FY 2026?
Yeah. Hi, Kunal. We just mentioned to Neha, we are maintaining guidance of 18%-20% for the BSV for FY2026. So the breakup that you mentioned is also on track. There is no change there.
Within this 18%-20%, which piece is expected to grow faster, domestic versus exports?
No. So as you rightly picked, domestic should be in the region of 12%-15% plus, and international should be in the region of 18%-20% plus.
Okay. And so blended should be 15%-16%?
Do not forget there's an element of TTK RX business. Last year, Q4 was a washout. It had seen a major decline. We mentioned it has seen a massive Q&Q growth. That business has stabilized on a YOY front, and we expect high growth in that business. Overall, if you see, 18% should be achievable. As of now, we maintain that guidance.
Any color on the profitability of the BSV business as it stands now in quarter two?
Yeah. So we are maintaining it is about 26%-28%. It will be H2 heavy given sales are heavier on the H2 side. Currently, it is a notch lower than the company average.
It should improve to that 26%-28% level in FY26, the second half?
That is correct. Yes.
Okay. For FI2728, we were expecting some form of cost synergies. By kind of reducing certain staff, etc. Is that already factored in? Have we taken the action on that front?
Yeah, yeah. We mentioned in the last call also, we have seen a good improvement in the women healthcare TTK RX business. From 550-plus MRs, that has been normalized to about 325-plus. Sales have started improving. We are seeing MR productivity increase from around INR 200,000 PCPM to now about INR 290,000 PCPM, and we expect this number to grow much more in the upcoming quarters and years. That is one big synergy that has played out because Mankind's operating model understands the RX business better. That is one big piece that we have done. Second, we have done price vendor negotiation in terms of suppliers, in terms of raw materials. We have gained there. The margins of the TTK RX business have also improved there. There are other R&D synergies that are playing out. There is corporate overhead synergies that will play out also in the future. So we are on track with our earlier guidance. Ashutosh, you want to add?
No, fair enough. So it's not about the cost synergies so much. We have optimized on the cost synergies over the last 12 months' period since we did this acquisition. This acquisition is more around the revenue synergies, which is just going to pan out in the times to come.
Some synergies are getting set off by increasing our R&D cost. We are increasing our R&D cost as well, which is setting off some synergies.
You have to look at it more from the revenue synergy point of view, Kunal, rather than purely cost-plus synergies.
Sure. So then the margin improvement for BSV from here on is a function of revenue growth rather than cost item, right? Is it fair?
Going forward, your understanding is correct. Yes.
Yes.
Okay. Okay. Second question, slightly on a longer-term basis, if I look at we have this chart about Mankind's chronic performance versus IPM chronic performance in the presentation, right? If I see over the last few quarters, the gap between the outperformance vis-à-vis IPM has kind of reduced, right? If I also kind of then tie it back to some of the commentary that we had last year, that we were taking some selective price hike, etc., as well, because our prices were anyway lower than our competitors. Is it fair to say that now the prices are more in line with the competitor and that phase of the price hike-driven growth, which had led to the higher differential versus IPM, is done, and now it is just focusing on volumes, and hence the gap could not be very high?
Kunal, I mean, every year, every company takes some kind of a price hike. Since historically, we have always been very, very affordable, more economical than any competitor, that gap is always there. Intentionally as well, we always maintain some kind of a gap to have some kind of value addition in our own products. That is there, and that would always be there. We are quite conscious of this fact that because our chronic sales are not coming from only specialized doctors, it is coming from tier two side, tier three side as well. It is quite well spread out. We just take care of one thing: whenever we take a price hike, it should not be too much. We should always maintain some kind of a gap between other brands and Mankind's brands.
Sir, is it fair to say that the price hike we would have taken last year or, let's say, a few quarters back, relatively, the price hikes we have taken in the last couple of quarters would be lower?
Yeah, Kunal, let me—if you look at the IQVIA data for H1 FY26, the IPM price increase is 4.2%. If you compare it to Mankind price increase, that is 3.9%. We are maintaining that competitive advantage of a notch lower than the IPM, the price increase part.
Sure. Thank you and all the best. Yes, it has.
Thank you.
Thank you.
Thank you. The next question is from the line of Madhav Marda from FI industries . Please go ahead.
Hi, good evening. My question was on the domestic business. I think we are consistently growing ahead on volumes of the industry. Price growth, I think you just mentioned, is a little bit lower. It seems like the big difference is coming from new launches of Mankind versus the broader industry. Is that the right understanding? If it is, then why are our new launches sort of trailing competition?
Madhav, in 30 years' time, we have become the fourth-largest company. That means what? We have always grown faster than IPM, much faster than IPM. If right now we have not really come to our expectations, we are not happy, I mentioned that. Because sometimes, I mean, last year, 9-10 months back, we took certain structural changes, a lot of changes we brought, transformation we brought in Mankind in terms of number of people. Because during COVID time, a lot of—I will say that, I mean, people started working from home. Practices were changed. We saw that and took a courageous action of bringing huge changes in Mankind in terms of number of people. One, our company's acute sale is 60% plus. Number two, our company's a lot of sales come from tier two, tier three, tier four town where relationship of people matters.
When we changed people, we thought that we would be able to replace them, train them, and bring at par with our old people. This did not happen. This is one major reason. Second reason, we took BSV. Once you take a company, you just, first of all, clean up the company. Look at that. Naturally, that was also going on. Third was the same kind of transformation we were bringing in our OTC. In all three, companies of different sizes and specialties, I mean, these changes were taking place. Not to forget, we are acute heavy. Not to forget, we depend upon a lot of GP doctors. We are very well spread out. Also, GST. It is a combination of, I will say, facts, not one-off. We cannot say that it is because of one particular reason.
Because when you bring huge changes, which were required, I mean, the conservative approach can be that we can bring slowly some kind of changes, aggressive approaches, go in one go and bring all the changes. We did that, keeping long-term strategies and planning in mind.
Yeah, I understand that.
You may not see a lot of launches. In the last one or two quarters, you may not see a lot of launches, but the last two to three years, we have done some very good launches. The focus is to consolidate the market share of those launches, whether Vono Pradhan, InfoZine, PCC Corp, and a couple of other pieces.
Yeah. That is what I wanted to clarify, that if our secondary growth is 6.3%, market is 7.2%, but our volumes are growing faster than the industry, and price growth is slower. Implied basis, I am just saying new launches are actually slower than the industry. That is what I wanted to understand, that most of the gap is explained by new launches, right? Volumes are still beating the industry. I mean, that is the question.
Madhav, I'll give you some color. What Rajeev Ji said about last year, we were 1x, approximately 1x of the industry versus our past track record of 1.3x plus. Q1 post the changes, we saw good acute season, and we outperformed industry. We were 9.2% versus industry growth of 8.6%. The turnaround was largely due to volume growth. We were 2.5% volume growth. Market was 1.4%. Despite having lower price increase of 3.4% versus market of 4.2%. Yeah. And new product, we were in line with the market. Now, what has happened in Q2? Just to break up into three months, July, August, September. If you see July, August, we have actually done better in volumes versus the market. It is September due to GST impact. We are minus 3% versus industry of minus 1.6%. There, we have got little more impacted. As Rajeev Ji mentioned, acute heavy business and tier two to tier three exposure has been higher for us in the past and historically. That is the reason, apart from all those transformative actions, that has added to the boost.
Okay. So just a second question on the margins. If I remember right, you all have guided for 25%-26% EBITDA margin for FY2026. Can we still achieve that for the full year? Or can there be a bit of a slip up there? Thank you.
We are maintaining the same guidance, Madhav, with the caveat that we expect the year-end, by year-end, we expect that we will be at the lower end of the guidance. It will be within the 25%-26% range, but at the lower end of that guidance.
For the full year, right?
For the full year, correct.
Got it. Okay. Yep. Thank you.
Thank you. We would like to remind all our participants, if you wish to register for your questions, you may press star and one at this time. The next question comes from the line of Harshit Dhoot from Dymon Asia Capital. Please go ahead.
Hello. Am I audible?
Yes, sir, you are.
Yeah. Yeah. Thanks a lot for the opportunity. Sir, you said organic business growth is at 8% YOY, right?
Which business, sorry, Harshit?
Hello.
Sir, our organic domestic business. Hello. Yeah. Sir, our organic domestic business grew 8% year-on-year, right? That's what you said.
Yeah. H1 IPM was 8%. Ours is also in line with IPM. If you talk about H1, Q2, it was around 6.6% organic for domestic pharma business, excluding OTC.
Yeah. Okay. Even taking this number and export business at 5% YOY growth, and then we will get the total revenue of this business. If you deduct that number from the reported revenues, this does not suggest that BSV is growing Q2. Can you please help with this math, sir?
Can you repeat your question? Your voice is muffled.
I can barely hear you.
Am I audible now, sir? Now it's clear, sir? Voice is clear?
Yes, sir.
Yeah. So, sir, see, domestic organic business grew 6.6% YOY. Consumer healthcare declined 3% YOY. Export business grew 5%. Our organic export business, 5% YOY. So when we took this number, adding this growth on the base business, we are coming out at the total revenue from operation from the base business and subtracting it from the reported revenues, then we are impliedly getting the BSV numbers, right? This is not suggesting Q2 double-digit growth. Just want to correct my math. If I'm missing something here?
No, no. Harshit, we said YOY, it's a high single-digit growth. On a sequential basis, it is double-digit growth.
Exactly, sir. Sequentially, it's not coming. So that's why I'm asking the question.
I don't know what the Q1 number you have, but it is a double-digit growth.
Q1, you also guided for around 8% growth in Q1, right, sir? In organic domestic business? That's what you said on the call last time.
Unable to hear you, sir.
Sir, in organic business, you guided for around 8% growth in the first quarter, right, sir?
Yes. First quarter, we have guided for organic growth of 9% plus. Organic growth for domestic business.
Yeah. Okay, sir. Okay. Thanks. Thank you.
Thank you. The next question is from the line of Alankar Garude from Kotak Institutional Equities. Please go ahead.
Hi. Good evening, everyone. First question, why was the impact of GST higher on OTC vis-à-vis the RX portfolio? Also, within OTC, which brands got impacted due to the uneven monsoons? If you're on the OTC side, what basically happens, it's a bit of push always. In the case of pharma, it's always the prescriptions. That's one reason. When GST came, people started not taking much of the goods. One. It was one, GST. The second was rain. I mean, too much of rains happened, so naturally, our people were unable to reach. I mean, a lot of hamper was there in Birkin as well. That's the reason for that. It was GST and huge rains.
Okay, Rajeev Juneja. Any specific? Yeah, go ahead, please.
In OTC, I mean, it's always, I mean, push from people's side as well. I mean, more inventory you keep, more it is visible, more sales happen.
Alankar, at the same time, secondary sales of Manforce and Gas-O-Fast have grown. Manforce grown by 14%, Gas-O-Fast grown by 35% year-on-year basis. So secondary sales have grown. Maybe the primary sales have an impact.
Got it. The second one is, can you explain which areas has BSV increased its R&D investments over the last few quarters, especially since Mankind took over? Any specific platforms or any specific areas which you would like to highlight?
There are multiple projects going on, both in Mankind as well as BSV. In Mankind, we have talked about the GPR-119. That is progressing, and there was some increase due to that. In BSV, there are a couple of projects, both on recombinant niche biologicals as well as immunoglobulins. Those projects are also on track.
When do we expect some conclusion of studies or any data points on that, Prakash?
These things take a little longer, right? These are recombinant biological products, but we'll keep you updated. We'll give you some update at the end of the year. Q4, we'll come up with an update.
Okay. Fair enough. The other question is on Panisha. Last time, you spoke about 25%+ growth year-on-year. Can you highlight the similar number for this quarter?
Actually, as mentioned last quarter, different brands have gone into different divisions. Bringing all together now is getting difficult. It would be fair to say that 15%-20% growth we are still seeing. Yeah, so.
Yeah. We said 25% plus. This year, it is not lower than 25% for the Panisha portfolio.
Okay, sir. Final question from my side. Rajeev Ji, you spoke about outperforming the market by 1.1-1.2 times in the second half. Now, historically, we have done better than that. You spoke about some of the issues over the last few quarters. Beyond second half, if I look at Mankind from a three to five years lens, should we continue to expect 1.3-1.4x outperformance over the IPM, or is 1.2x the new normal?
See, Mankind is a 30-year-old company. In pharma industry, no company in 30 years has reached to fourth-largest company. One. How we have reached to this particular space only by outperforming always IPM. Otherwise, this would not have been possible. So whatever actions we have taken last year, whatever transformative actions we have taken in the last year, not many companies can take. I mean, is it possible for some company to really overall make a deep overhauling, deep cleaning in the total organization and to a very large extent? It's a very, very, I will say, tough job, courageous job. We have done that. Same thing happened in OTC. By chance, I'll say it was a coincidence. At that time only, BSV happened. All three things happened. We hope that we will be able to.
I mean, replace those people, train those people, a few thousand people, right, and make sure that they are properly placed and start performing as it was happening in the past. It was a bit overestimation. We feel that whatever has happened, whatever we have done, actually, it is keeping only next three-five years in mind only. These are all actions taking, I mean, long-term. Future of Mankind in mind. Manifestation of Mankind is always becoming numero uno in pharma industry.
Okay, sir. If I understood that correctly, basically, you will not be happy with only 1.1 or 1.2x. The endeavor would be to another.
1.1-1.2x only for this second half. Only. I mean, this is not basically habit of Mankind performing 1.1-1.2. This is only for the second half. Once this quarter is, I mean, done, we talk about next year.
Got it. Got it. Thanks a lot. This is input. Thank you.
Thank you. The next question comes from the line of Alok Dalal from Jefferies India Private Limited. Please go ahead.
Yeah. Good evening, sir. Rajeev sir, you mentioned that it is taking slightly longer for the results to come. Is it about being more patient with the changes that you made, or do you need to make some more investments to bring the desired results?
We have done plenty of changes. I mean, the kind of changes we have done, no complication doing just, I'll say, one-year time. Whatever changes. See, these changes were finished in the month of March. I mean, it took us approximately three-four quarters to bring all the changes. By end of March, we completed those. We thought that we would be able to replace, train, place again, make sure that those people start performing as good as the previous people were performing, older people were performing. It did not happen. Whatever has happened has happened. Now, with the passage of time, things will move faster. That only I can speak right now. That's one reason. Keeping that in mind, we are seeing second half of Mankind would be 1.1-1.2x to IPM.
Sure. Thank you. In your view, what are the pain points at this moment? Where do you see these challenges? How do you see the change happening in the second half?
See, I mean, see, whenever you bring, I mean, a lot of people, new people from outside, different talent, the only thing basically you work on is making sure that they understand Mankind. They start working like Mankind. They settle down. They establish themselves. They are being made comfortable, and they really understand the culture of Mankind, the way we work, actually. That's the only thing. I mean, it takes time, I mean, people to adjust, understand new people, old people. I mean, making sure that older Mankindians, newer Mankindians mingle together nicely and work in one direction for, I'll say, progress.
When a new medical app manager goes in the doctor chamber, he takes a little time to develop a relationship with the customer. It is a new face. The person who is working since the last five, seven, eight years. Suddenly, a new person went in the doctor chamber. He will take a little time. Three, four visits. Another two, three visits, the result will start flowing.
Sure. Okay. Thank you for taking my questions.
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management of Mankind Pharma for closing comments. Over to you, sir.
Thank you for coming and asking questions. For any further questions, please feel free to write to us. Thanks. Have a nice day. Stay happy. Stay healthy.
Thank you.
Thank you. Thanks, everyone. Thank you.
Thank you all. Thank you all on behalf of Mankind Pharma. That concludes this conference. Thank you for joining us, and you may now disconnect your lines.