MANGALAM - Mangalam Drugs

📊 NSE: MANGALAM 🏢 Pharmaceuticals - Indian - Bulk Drugs & Formln 📅 Last Updated: 12/14/2025 9:33

💰 Financial Performance

Revenue Growth by Segment

Total revenue from operations decreased by 13.66% YoY, falling from INR 36,859.47 Lakhs in FY 2023-24 to INR 31,823.02 Lakhs in FY 2024-25. For the half-year ended September 30, 2025, the company reported a significant downturn with a net loss before tax of INR 2,546.50 Lakhs compared to a profit of INR 178.45 Lakhs in the same period of the previous year.

Geographic Revenue Split

Historical data indicates a heavy domestic focus with 83% of revenue derived from the Indian market as of FY16. Recent updates highlight a growing international presence through repeat export orders, such as a recent INR 15 Crore order for Anti-Malarial APIs from an international client.

Profitability Margins

Net Profit Margin improved to 0.02% in FY 2024-25 from a negative 0.02% in FY 2023-24. Operating Margin Ratio increased to 0.06% in FY 2024-25 from 0.01% in FY 2023-24. However, H1 FY26 shows severe margin pressure with a total comprehensive loss of INR 2,123.44 Lakhs.

EBITDA Margin

Historical EBITDA margins reached 12.8% in FY16. In FY 2024-25, the operating margin stood at 6%, but the company faced a sharp decline in H1 FY26, reporting an operating loss before working capital changes of INR 766.03 Lakhs.

Capital Expenditure

Not explicitly disclosed in absolute INR Cr for the current period; however, the company has a history of upgrading facilities, such as the Facility 1 upgrade in 2011 to support Anti-Retroviral API production.

Credit Rating & Borrowing

The Debt-Equity Ratio improved to 0.65 in FY 2024-25 from 0.75 in FY 2023-24. Interest Coverage Ratio stood at 1.33 in FY 2024-25, a recovery from 0.21 in the previous year, though finance costs rose to INR 907.28 Lakhs in H1 FY26 from INR 741.39 Lakhs in H1 FY25.

⚙️ Operational Drivers

Raw Materials

Key inputs include chemical intermediates for Anti-Malarial, Anti-Retroviral, and Anti-TB APIs. Specific chemical names are not listed, but raw material consumption is the primary cost driver for the API manufacturing process.

Capacity Expansion

Current operations are centered at the Vapi (Gujarat) facility. While specific MTPA figures are not provided, the company has historically expanded from Nimesulide into Anti-Malarial and Anti-Retroviral API production lines.

Raw Material Costs

Not disclosed as a specific percentage of revenue, but total expenses for H1 FY26 were INR 12,331.32 Lakhs, reflecting the high cost of chemical procurement for API synthesis.

Manufacturing Efficiency

Manufacturing efficiency is impacted by lower turnover; Inventory Turnover Ratio declined from 1.87 in FY24 to 1.28 in FY25, indicating slower movement of stock.

📈 Strategic Growth

Growth Strategy

Growth is targeted through the absorption of Mangalam Laboratories and Shri JB Pharma (merger hearing Dec 16, 2025), securing repeat international export orders (INR 15 Crore), and leveraging WHO/EDQM approvals to enter regulated global markets.

Products & Services

Active Pharmaceutical Ingredients (APIs) including Anti-Malarials (Artemether, Lumefantrine), Anti-Retrovirals, Anti-TB drugs, and Nimesulide.

Brand Portfolio

Mangalam Drugs & Organics Limited.

New Products/Services

The company has diversified from basic APIs into specialized Anti-Retroviral and Anti-Malarial products, with recent focus on repeat export orders contributing to revenue visibility.

Market Expansion

Expansion is focused on international markets, evidenced by the recent INR 15 Crore export order to be executed within a 2-4 month span.

Strategic Alliances

The company is undergoing a merger by absorption with Mangalam Laboratories Private Limited and Shri JB Pharma Private Limited to achieve operational synergies.

🌍 External Factors

Industry Trends

The API industry is characterized by high entry barriers (2-3 years for new entrants) and stringent quality standards. There is a shift toward consolidated supply chains and a requirement for WHO/EDQM certifications.

Competitive Landscape

Competes with well-established large API players in the domestic and international markets, particularly in the Anti-Malarial and Anti-Retroviral segments.

Competitive Moat

The moat is built on regulatory approvals (WHO, EDQM) and the 2-3 year lead time required for competitors to establish manufacturing facilities and obtain necessary certifications.

Macro Economic Sensitivity

Highly sensitive to international healthcare funding policies and government regulations regarding pharmaceutical pricing and patent laws.

Consumer Behavior

Demand is driven by global health initiatives and the prevalence of infectious diseases like Malaria, HIV, and TB.

Geopolitical Risks

Changes in U.S. government fiscal policies, specifically the discontinuation of US-AID funding, pose a direct threat to the demand for the company's core API products.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Companies Act 2013, SEBI Listing Regulations, and international pharmaceutical standards set by WHO and EDQM.

Taxation Policy Impact

The company has recognized Deferred Tax Assets (DTA) on tax losses for H1 FY26 based on management's projections of future taxable profits.

Legal Contingencies

The company is awaiting a final hearing from the National Company Law Tribunal (NCLT) on December 16, 2025, regarding the merger with Mangalam Laboratories and Shri JB Pharma.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the financial impact of the loss of US-AID funding, which could lead to a sustained reduction in demand for the company's primary API products.