Biocon Ltd. share price target

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.

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)...

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...

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...

We recommend BUY' with target price of INR 435 (35x FY22E earnings).

We retain Buy recommendation on the stock of Biocon with a revised PT of Rs. 520. Biologics segment is expected to be a significant growth driver and the company is well placed to harness the opportunities emerging in global biosimilars space. Sturdy growth prospects, strong earnings visibility, healthy balance sheet position and lower debt-equity augur well for the company. The possible listing of its wholly owned subsidiary - Biocon Biologics Limited...

We have increased our target price to INR 505 (PEx 32x to FY23E earnings).

Biocon Ltd is an integrated biotechnology enterprise with a presence in biopharmaceuticals, enzymes, custom research and clinical research. The Company's pharmaceutical products include statins, immune suppressants and anti-diabetic drugs.

Outlook remains intact on new product launches, strong pipeline and limited competition in Biosimilars. Additionally, demographic changes will help drive demand across products. Hence, we maintain our BUY...