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Here’s why Mankind Pharma (NSE:MANKIND) has caught investors’ attention

Investors are often driven by the idea of ​​discovering “the next big thing,” even if that means buying “historic stocks” without any income, let alone profit. But the reality is that when a company loses money every year, and for long enough, its investors usually take on their share of those losses. Loss-making companies are always racing against time to reach financial viability, so investors in these companies may take on more risk than they should.

If this type of business is not your style, and you like businesses that generate revenue, or even profits, then you may well be interested in Humanity Pharma (NSE: THE MAN). Although profit is not the only metric to consider when investing, it is worth recognizing companies that can produce it consistently.

See our latest analysis for Mankind Pharma

Mankind Pharma’s earnings per share are growing

If a company can keep its earnings per share (EPS) growing long enough, its stock price should eventually follow. This makes EPS growth an attractive quality for any business. Mankind Pharma managed to increase its EPS by 13% per year, over three years. This is a good growth rate, if it can be sustained.

One way to check a company’s growth is to look at how its revenue and earnings before interest and tax (EBIT) margins are changing. While we note that Mankind Pharma delivered similar EBIT margins to last year, revenue grew 18% to ₹99b. This is progress.

The chart below shows how the company’s financial and top-line results have changed over time. Click on the chart to see the exact numbers.

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NSEI:MANKIND Historical Earnings and Revenue May 8, 2024

In investing, as in life, the future matters more than the past. So why not check that out? free interactive visualization of Mankind Pharma forecast benefits?

Are Mankind Pharma insiders aligned with all shareholders?

Seeing insiders owning a large portion of issued shares is often a good sign. Their incentives will be aligned with those of investors and there is less likelihood that a sudden sale will impact the stock price. So we’re happy to announce that Mankind Pharma insiders own a significant stake in the company. To be exact, company insiders own 59% of the company, so their decisions have a significant impact on their investments. Intuition will tell you that this is a good sign, because it suggests that they will be incentivized to create shareholder value over the long term. At the current share price, this insider stake is worth a staggering ₹528 billion. This means that they have a large part of their own capital which depends on the performance of the company!

Does Mankind Pharma deserve a spot on your watchlist?

An important encouraging aspect of Mankind Pharma is its increasing profits. If that’s not enough in itself, there are also the quite notable levels of internal ownership. Both of these factors constitute a major strength for the company, which should be a strong contender on your watch lists. Remember that there may still be risks. For example, we identified 1 warning sign for Mankind Pharma which you should be aware of.

It is still possible to succeed by buying stocks that are not growing income and not have insiders buying shares. But for those who consider these metrics important, we encourage you to check out companies that TO DO have these characteristics. You can access a personalized list of Indian companies that have demonstrated sustained growth through recent insider buying.

Please note that the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

The assessment is complex, but we help to simplify it.

Find out if Humanity Pharma is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

See the free analysis

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to constitute financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or your financial situation. Our goal is to provide you with targeted, long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.