Mankind Pharma has informed stock exchanges about a search and seizure operation conducted by tax authorities at its wholly owned subsidiary Bharat Serums and Vaccines Limited (BSV). The pharmaceutical company made the disclosure under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015.

GST Search Operation Details

The search and inspection operation was carried out by the Assistant Commissioner of State Tax (D-0214), Investigation – B, Mumbai, under Section 67 of the Maharashtra Goods and Services Tax Act, 2017. The operation commenced on February 03, 2026 and concluded on February 08, 2026, spanning six days.

Areas Under Investigation

The search and inspection operation focused on several key areas of GST compliance. According to the company's disclosure, the investigation covered:

• Payment of tax obligations
• Claims of input tax credit
• Reconciliation processes
• Refund procedures

Company Response and Cooperation

BSV demonstrated full cooperation with the investigating officials throughout the proceedings. The subsidiary provided all necessary documents, clarifications and details as requested by the authorities. The company has committed to continue extending support and furnish any additional information if required by the tax department.

Crucially, business operations at BSV continued as usual during the entire search and inspection period, ensuring minimal disruption to the subsidiary's activities.

Financial and Operational Impact

Mankind Pharma has assessed the impact of the GST search operation on its subsidiary's performance. According to the company's official statement, there is no material impact on BSV's financials, operations or other activities due to the search and inspection.

The disclosure was signed by Hitesh Kumar Jain, Company Secretary and Compliance Officer of Mankind Pharma Limited, and submitted to both BSE Limited and National Stock Exchange of India Limited on February 09, 2026.

Mankind Pharma reported its Q3 FY26 financial results through an earnings call held on February 3, 2026, showing revenue growth amid ongoing organizational transformation challenges that have impacted overall performance.

Consolidated Financial Performance

The company delivered consolidated revenue from operations of ₹35.67 billion for Q3 FY26, representing an 11.5% year-on-year increase from ₹31.99 billion in Q3 FY25. For the nine-month period, revenue reached ₹108.35 billion, marking an 18.7% year-on-year growth.

Consolidated net profit reached ₹4.14 billion compared to ₹3.78 billion in the year-ago quarter, showing a 9.5% improvement. The diluted EPS stood at ₹9.90 per share, while Cash EPS increased to ₹15.60 from ₹13.90, marking a 12.1% year-on-year growth.

Business Segment Performance

Domestic business recorded revenue of ₹30.46 billion in Q3 FY26, representing 11.1% year-on-year growth with organic growth of 9.1% excluding OTC. The company's chronic therapy segment continued strong performance with cardio growing 16.7% and antidiabetes expanding 14.4% in Q3.

The company's chronic therapy contribution increased by 200 basis points year-on-year to 36.7% in the nine-month period, outperforming IPM by 1.2x in cardio and 2.2x in antidiabetic segments excluding GLP-1.

Transformation Challenges and Recovery

Management acknowledged significant organizational transformation challenges over the past 12-15 months, including field force restructuring that impacted approximately 20-25% of the team. Vice Chairman Rajeev Juneja explained that the company underestimated the complexity of integrating new personnel with Mankind's unique culture focused on daily sales hygiene rather than traditional targets.

The acute therapy segment, representing approximately 60% of business, was particularly affected due to its dependence on personal relationships with general practitioners. However, management expressed confidence in gradual recovery with improving team stability and reduced attrition rates.

Profitability and Margin Analysis

Gross margins improved by 170 basis points year-on-year to 72.6% in Q3 FY26, driven by sales price increases, favorable sales mix, and inventory-related accrual releases. However, adjusted EBITDA margin declined to 25.9% from 27.6% due to increased R&D costs and higher employee expenses.

The company maintained its R&D guidance of 2.5-3% of revenue and capex guidance of 4-5% of revenue, with nine-month capex spending at ₹4.73 billion representing 4.4% of total revenue.