Condom maker draws rush of buy calls on 57% jump since India IPO

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Mankind Pharma Ltd. It has the most analyst coverage of any new Indian stock in at least 12 years, as investors rush to buy medicines and condoms afterwards. May initial public offering.

The company’s stock is up 57 percent since listing, pushing its market value to more than $8 billion. It has already got nine buy ratings and one comment recommendation. This is the largest coverage in a similar time period for an Indian stock that has raised more than $500 million since November 2010, according to data compiled by Bloomberg.

“It is a homegrown pharmaceutical company, grown organically, with solid foundations,” said Shrikant Akolkar, analyst at Asian Markets Securities Pvt. “Investors love a story like that.”

Although most analysts covering the company recommend buying it, the agreed-upon price target is already 10 percent below the current level amid the stock’s excellent move. The shares trade at around 53 times 12-month earnings, compared to 31 times for India’s benchmark drug index.

“Everyone was waiting to buy the stock because their valuations during the listing made sense,” said Vishal Avinash Manchanda, vice president of institutional research at Systematix Group, which has the sole rating on the stock. “But I think they’re a little tired now.”

To its credit, Mankind enjoys name recognition among Indian consumers and investors due to its popular line of consumer products. Akulkar also points out that it does not depend much on exports, which protects it from some of the problems its export peers face. US inspectors recently revealed widespread problems at factories run by Indian pharmaceutical companies.

Mankind gets 97 percent of its sales from India, the highest proportion among drug makers in the country of similar size or larger. About eight percent of its domestic sales come from consumer healthcare products, including condoms, in which it has the largest market share in the country of 1.4 billion people.