PharmaceuticalsMarksans Pharma's profit nearly tripled. How much of it will last?

Marksans Pharma, a Mumbai maker of everyday medicines sold mainly in the US, UK and Australia, earned ₹159 crore in April-June 2026, almost three times a year earlier. Unlike our first two picks, it has strong cash flow and more than ₹1,000 crore of cash. But part of the jump came from cheap raw materials bought earlier, a helpful rupee and two European purchases, and management itself expects margins to ease. Growth for the full 2025-26 year was only 12%. At about 27 times profit, it looks like a solid business rather than a Cupid-style rocket. Why we are looking at it Cupid's share rose about 30 times in 19 months on fast, real profit growth and rising margins. We have been looking for companies with similar early signs. After Vintage Coffee and Kwality Pharmaceuticals, the third name is Marksans Pharma. What Marksans does Marksans makes copies of common off-patent medicines, such as pain relief, cough, stomach and diabetes medicines, many sold over the counter. It has plants in India, the US and the UK approved by the US, UK and Australian drug regulators. North America brings in about 45% of sales, the UK and Europe about 42%, and Australia and New Zealand most of the rest. The founder, Mark Saldanha, runs the company, and US healthcare investor OrbiMed has been a shareholder since 2021. The numbers Sales rose from ₹2,177 crore in 2023-24 to ₹2,623 crore in 2024-25 and ₹2,951 crore in 2025-26. Profit went from ₹315 crore to ₹383 crore and ₹420 crore. That is steady, but only about 10-12% growth in the last year. Then April-June 2026 jumped: sales of ₹841 crore, up 36%, and profit of ₹159 crore against ₹58 crore a year earlier. The operating margin rose from 16% to 25%. UK and Europe sales grew 75%. How much of the jump is lasting Some of it comes from buying companies. Marksans bought QliniQ in the Netherlands, which added ₹44 crore of sales in the quarter, and ABCnow in Germany, which will be counted from July. Without QliniQ, sales grew about 29%. Some of it is one-off. Management said margins were helped by cheap raw materials already in stock and by a favourable rupee. It expects the gross margin to fall from 59% back to about 55-56%. Also, April-June 2025 was a weak quarter, which makes this year's growth look bigger. What is strong Cash. Marksans brought in ₹458 crore of cash in 2025-26 and ₹185 crore in April-June 2026. It had ₹1,058 crore of cash in June 2026 and almost no debt. This is the big difference from our first two picks. Growth engines. It launched 112 new products in the US in 2025-26 and plans more than 200 filings in Europe over four years. It has started a branded prescription medicine business in Australia and set up companies in Ireland, Germany and Canada. A rating agency, India Ratings, changed its outlook to Positive in 2026. The risks Price cuts. Copies of off-patent medicines face steady price cuts, especially in the US. Margins may slip back as cheap stock runs out and raw material and freight costs stay high because of the West Asia conflict. Rest-of-world sales fell 37% in April-June 2026 because of Middle East shipping delays. Buying companies always carries the risk of paying too much or struggling to merge them. The price The share hit about ₹353 in late 2024, fell to about ₹157 in early 2026, and closed around ₹309 on 8 October 2026. The company is worth about ₹14,000 crore, roughly 27 times last year's profit. Because it is already a mid-sized company, a 30-times rise like Cupid's is much harder. The case here is a steady, cash-rich business that can keep growing, not a quick multi-bagger. Our verdict Of our three picks so far, Marksans has the cleanest accounts: real cash, no debt, and a long record. But the latest quarter flatters it, and the full-year growth rate is more modest. What to watch: whether margins hold near 22-25% after the cheap stock is used up, how fast Europe grows, and US price cuts. More gems coming Marksans completes our first list of three. We will keep screening for small companies with real, fast growth and share the next gems in future posts. For information only, not investment advice. This report was produced entirely by AI. Using the same AI research platform accessible on stocktracker.co.in.