Biocon Ltd. share price target

BIOS delivered an operationally in line 2QFY22, while higher other income led the earnings beat. The healthy show in Research Services and ramp-up in Biosimilar sales was dragged down by the Generics segment on a YoY basis. We lower our FY23E EPS estimate by 3%, factoring in: a) pandemic-led delays in inspection, thereby having a subsequent impact on the approval timeline, b) gradual pick-up in market share for Insulin Glargine c) intense pricing pressure in Generics, and d) an increase in raw material prices. We value BIOS at 32x 12-month forward earnings to arrive at our TP of...

Robust biosimilar portfolio with partners like Viatris, Sandoz (for future launches), Adagio among others. Biosimilar US pipeline: (Approvals Pegfilgrastim, Trastuzumab, Glargine, Adalimumab); filed - Aspart and Bevacizumab. Global footprint in +120 countries for biosimilars In generics, it is among the world's...

BBL also entered into a strategic alliance with SILS with an offer of 15% stake in BBL with post money valuation of BBL ~ US$4.9 billion. The alliance gives BBL access to 100 million doses of vaccines/annum for 15 years with commercialisation rights (including Covid-19 vaccines) for global markets The strategic alliance will also develop antibodies along with a service level agreement (SLAs) for manufacturing and distribution of the vaccines and antibodies. Additionally, Biocon Biologics will establish, at its cost, a vaccine R&D; division for developing both vaccines and biologics for communicable...

Biocon reported weak numbers from the last 3 quarters, as the industry is facing price erosion challenges. Furthermore, the company is trading at rich valuations therefore we recommend HOLD with TP Rs 400.

We expect Biocon to witness long-term sustainable growth on the back of strong pipeline, new launches and increasing investments. We remain positive on the stock and reiterate our BUY rating with a revised target price of Rs. 430 based on 34x FY23E adj. EPS....

We believe, Biocon Ltd is well placed to grab upcoming opportunities in the biosimilars market in the next 5 years. However, due to rich valuations, there is limited upside potential to retain. "Buy" with a TP of Rs 430.

Q4FY21 revenues grew 16.3% YoY to | 1839 crore. Biosimilars grew 53.2% YoY to | 664 crore due to low base effect. Research services segment grew 8.4% YoY at | 659 crore. Generic sales grew 2.7% YoY to | 578 crore due to pricing pressure and stockpiling by customers in H1FY21. EBITDA margins improved 355 bps YoY to 23.7% mainly due to strong gross margins and lower R&D; cost. EBITDA grew 36.8% YoY to | 436 crore vs. I-direct estimate of | 470 crore. Adjusted PAT grew 96.6% YoY to | 243 crore. Delta vis--vis EBITDA was due to higher other income, which included | 160 crore gain...

BIOS delivered lower-than-expected 4QFY21 result due to: a) moderation in performance of Biosimilars, and b) sluggish growth in Generics. While the business environment remains challenging on account of COVID-19, it continues to build a product pipeline of Biosimilars/Generics to create a foundation for growth over the next 4-5 years. We lower our FY22E/FY23E EPS estimate by 10%/3%, factoring in a delay in: a) approvals for Biosimilars in the US, b) award of tenders in emerging markets, c) gradual build-up of the insulin glargine business, and d)...

the integrated drug discovery platform (IDD) with four new projects from Deerfield 550 Discovery and Development (3DC). However, revenue from Generics segment declined 450 2.7% YoY to Rs. 561cr, impacted by advance buying owing to pandemic, supply 350 disruption and delay of approval of certain key products. Margin contracted on higher R&D; expenses EBITDA stood at Rs. 427cr, decline of 11.0% YoY, with margin contracting 490bps YoY to 23.1%, mainly due to higher R&D; expenses and employee cost related to Biosimilars business. Gross R&D; spends increased 18.1% YoY to Rs. 183cr and employee cost as a...