Ace investor Vijay Kedia has placed a strategic bet on Mangalam Organics , a microcap pharmaceutical stock that has significantly underperformed the broader market over the past year. The investment comes through a bulk deal transaction that has generated renewed interest in the struggling pharmaceutical company.

Investment Details

Kedia acquired 1,37,794 equity shares of Mangalam Drugs through his investment company, Kedia Securities Private Ltd. The transaction details highlight the investor's confidence in the company's potential:

Market Response and Stock Performance

The bulk deal announcement triggered positive market sentiment, with Mangalam Drugs shares rallying 5% following the investment. This recovery helped the stock move away from its recent lows.

Despite the recent uptick, the stock's broader performance remains concerning:

Company Background and Operations

Mangalam Drugs & Organics has been manufacturing Active Pharmaceutical Ingredients (APIs) and Intermediates since 1977, with its primary facility located in VAPI, Gujarat. The company operates multi-product manufacturing facilities across two locations and maintains an in-house Research & Development laboratory recognized by the Department of Scientific & Industrial Research, Delhi, Government of India (DSIR). The company has established a reputation for its anti-Malaria APIs.

Market Implications

Kedia's investment in Mangalam Drugs represents a contrarian bet on a company experiencing significant financial and market headwinds. The investment demonstrates the seasoned investor's strategy of identifying potential value in distressed assets, though the company's current financial trajectory presents considerable risks.

Mangalam Organics , a leading manufacturer of pine chemicals and camphor-based products, has reported a robust 14.30% year-on-year revenue growth for the second quarter of fiscal year 2026. The company's revenue increased to Rs 158.10 crores in Q2 FY26, compared to Rs 138.32 crores in the same quarter of the previous year.

Improved Profitability

The company's performance in Q2 FY26 was marked by improved profitability, which management attributes to decreased input costs. This cost optimization has allowed Mangalam Organics to strengthen its bottom line despite ongoing market challenges.

Strategic B2B-to-B2C Transformation

A key highlight of Mangalam Organics' recent performance is its strategic shift from a primarily B2B pine chemicals manufacturer to include B2C operations. This transformation is centered around the company's CamPure brand of camphor-based home care products.

Expanding Distribution Network

As part of its B2C strategy, Mangalam Organics has significantly expanded its distribution network. The company now operates across 14 states, supported by a sales force of 190 personnel. This expanded reach is expected to drive further growth in the consumer segment.

Financial Performance Overview

All figures in Rs crores

While the company saw significant revenue growth, it's important to note the substantial decrease in EBITDA. However, the company managed to increase its Profit After Tax (PAT) by 50.94% year-over-year, indicating effective cost management and potentially favorable tax conditions.

Future Outlook

Mangalam Organics' strategic pivot towards B2C operations, coupled with its expanded distribution network, positions the company for potential growth in the consumer segment. The management's focus on the CamPure brand of camphor-based home care products may help diversify revenue streams and reduce dependence on B2B pine chemicals.

As the company continues its transformation, investors and industry observers will likely keep a close eye on how successfully Mangalam Organics balances its traditional B2B operations with its growing B2C segment, and whether this strategy translates into sustained profitability and market share gains in the coming quarters.