Record high FIIs stake in this multibagger pharma stock: Exploring the key tailwinds!

The company saw strong volume growth across key markets, particularly the US, indicating rising demand for their products.

On Tuesday, Indian indices continued their upward trajectory, with the NSE Nifty hitting a new peak of 22,215.60 during trading hours. The bullish trend persisted as both the BSE Sensex and Nifty closed higher for the sixth consecutive session, buoyed by robust buying in banking and financial sectors. The Sensex surged 349.24 points (0.5%) to 73,057.40, while the Nifty climbed 74.70 points (0.3%) to 22,196.95. This positive market sentiment sets the stage for discussing Marksans Pharma's recent quarterly performance, including its Q3 financial figures.

Marksans Pharma Ltd delivered impressive financial results for Q3 FY24. The company witnessed a substantial year-on-year (YOY) sales growth of 22 per cent, reaching Rs 586 crore compared to Rs 480 crore in December 2022. EBIDT soared by an impressive 74 per cent to Rs 133 crore from Rs 76.6 crore in the same period. Net profit also exhibited a notable increase, rising by 33 per cent to Rs 83.0 crore from Rs 62.3 crore. Additionally, EPS showed a healthy uptick of 17 per cent, reaching Rs 1.84 compared to Rs 1.57 in December 2022.

This growth was driven by factors like:

• Market Share Expansion: The company saw strong volume growth across key markets, particularly the US, indicating rising demand for their products.
• Strategic Initiatives: Infrastructure expansion, backward integration plans, and a robust product pipeline are likely contributing to their growth trajectory.
• Favorable Market Conditions: The overall pharmaceutical market landscape may have played a role in their positive performance.

Key Highlights from the Call:

• Robust Growth Across Geographies: Marksans Pharma witnessed notable growth in the UK and EU markets (34 per cent), the US and North America (18 per cent), and other regions.
• Profitability on the Rise: The company's EBITDA margin climbed to 22.7 per cent, driven by operational efficiency, cost optimization, and reduced raw material costs.
• Strategic Roadmap: Marksans outlined key initiatives like infrastructure expansion, backward integration through DMF filings, and increasing production capacity to over 6 billion tablets per annum.
• Focus on OTC and Niche Products: The company plans to capture a significant share of the OTC market and launch 34 new niche, high-value products in the UK over the next two years.
• Positive Outlook: Marksans expects healthy double-digit growth in both the UK and US markets, fueled by their product portfolio, strategic initiatives, and market expansion plans.

Investor Confidence on the Rise:

Institutional investor interest in the stock has risen significantly, with Foreign Institutional Investor (FII) holdings increasing to 15.55 per cent in the quarter ending December 2023 from 4.23 per cent in December 2022. Similarly, Domestic Institutional Investor (DII) holdings surged to 4.76 per cent in December 2023 compared to 0.96 per cent in December 2022. This heightened interest from institutional investors bodes well for the stock's outlook.

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Conclusion:

Marksans Pharma's strong Q3 performance, coupled with their strategic roadmap and positive outlook, paints a promising picture for the company's future. Their focus on expanding their production capacity, strengthening their presence in key markets, and launching new niche products positions them well for continued growth. Investors looking for opportunities in the pharmaceutical sector should definitely consider keeping an eye on Marksans Pharma's progress.

The stock is up by 39.75 per cent in the last six months and has delivered multibagger returns of 131.30 per cent in 1 year.

Disclaimer: The article is for informational purposes only and not investment advice