Shrikant Chouhan Bullish on Mankind Pharma, Dr Lal PathLabs Stocks

Two Healthcare Picks, With Different Engines for Growth

Mankind Pharma’s recovery hinges on stronger volumes and specialty growth, while Dr Lal PathLabs is betting on diagnostic demand and network expansion.

Two buy calls, two different operating stories

Chouhan has a buy rating on Mankind Pharma with a current market price of ₹2,465 and a fair value of ₹3,035. For Dr Lal PathLabs, the recommendation is also buy, with a current market price of ₹1,888 and a fair value of ₹2,150. The report also identifies near-term support and resistance ranges for both shares, but these levels are reference points rather than a guarantee of how either stock will trade.

The distinction between the calls matters: Mankind’s case is tied to a visible recovery in its base business and expansion in specialty areas, while Dr Lal’s rests on volume growth, mix improvement and a wider diagnostics network. Investors therefore need to assess not just the target prices, but whether each company can deliver on its own operating drivers.

Mankind’s recovery is showing up in volumes and margins

Mankind reported 17% year-on-year sales growth in Q2FY27, with EBITDA rising 27% and margins expanding by 210 basis points to 27%. The faster growth in EBITDA than sales points to the benefit of gross-margin gains and operating leverage. Secondary prescription sales grew 15.7%, outpacing the Indian pharmaceutical market by 100 basis points, while volume growth improved to 6.7% from 4.7% in Q1FY27.

The analyst’s longer-term thesis also relies on a shift towards chronic therapies, a larger hospital business, more megabrands and a broader over-the-counter portfolio. Mankind aims to increase chronic products to 50% of its mix by FY30E from about 39% currently, and raise the hospital business to about 5% of sales from roughly 1.7%. These are ambitions, not completed outcomes; delivering them will require successful product development, field-force expansion and disciplined capital allocation.

BSV, the company’s specialty business, has maintained growth above 20%, supported by domestic and international markets. Management expects international sales to continue growing at a double-digit pace in FY27. Chouhan forecasts overall earnings per share growth of about 23% annually over FY26-29E, following a subdued FY2026, making sustained volume recovery central to the recommendation.

Dr Lal’s case depends on volume momentum and network reach

Dr Lal PathLabs operates across pathology, wellness and preventive testing through laboratories, patient service centres and collection points. Its predominantly business-to-consumer model and established brand are central to its ability to serve customers across markets. The report points to rising health awareness, lifestyle diseases and a shift from unorganised to organised providers as potential sources of industry growth.

The company began FY27 with its strongest revenue growth in nearly five years, supported by test volumes, improved realisation per test and a greater contribution from specialised diagnostics. Swasthfit preventive-care packages are gaining traction, while Suburban Diagnostics is improving and emerging as a growth driver in western India. Management expects mid-teen revenue growth in FY27, with the analyst also anticipating healthy margins from operating leverage and a richer test mix.

Valuation and delivery remain the tests for investors

The analyst views Dr Lal’s premium valuation as justified by its industry position, earnings visibility and business quality, citing strong return ratios, cash generation, an asset-light model and a debt-free balance sheet. That premium still makes delivery important: slower volume growth or weaker-than-expected performance in newer markets could challenge the case. For Mankind, investors will need to watch whether better volumes and BSV momentum translate into sustained earnings growth, alongside progress on its chronic-care and hospital-business goals.

Key Highlights

• Kotak Neo’s Shrikant Chouhan has a buy recommendation on both Mankind Pharma and Dr Lal PathLabs.
• Mankind’s Q2FY27 sales grew 17% year on year, while EBITDA rose 27% and margins reached 27%.
• Mankind’s growth thesis includes a higher chronic mix, a larger hospital business and continued expansion at BSV.
• Dr Lal’s FY27 start was supported by test volumes, improved realisation and specialised diagnostics.
• Dr Lal’s premium valuation and both companies’ execution needs remain relevant risks to assess.

Investor Note: These recommendations reflect the analyst’s outlook, not assured returns. Investors should weigh the companies’ operating performance, valuation and ability to meet growth plans against their own risk tolerance and investment horizon.