Q3FY21 Result update - Biocon Ltd - ICICI Direct

Q3 revenues grew 5.9% YoY to Rs. 1851 crore. Generics sales de-grew 4.4% YoY to Rs. 561 crore due to statin APIs portfolio witnessing a muted demand owing to stockpiling by customers in Q1FY21. Biosimilars grew 9.5% YoY to Rs. 769 crore. Research Services segment grew 12.6% YoY at Rs. 584 crore. EBITDA margins contracted 383 bps YoY to 21.6% mainly due to higher employee, R&D and other expenditure. EBITDA declined 10.1% YoY to Rs. 400 crore as against I-direct estimate of Rs. 481 crore. Net profit declined 16.9% YoY to Rs. 169 crore.

Valuation & Outlook

Q3 results were below I-direct estimates on all fronts due to lower than expected Generics sales, profitability was also lower due to higher than expected employee cost and depreciation. As per management, due to operational, regulatory and commercial challenges amid Covid-19, its US$1 billion target for biosimilars by FY22 is likely to get postponed. This, besides stepping down announcement of the MD is likely to weigh on the near term sentiments. Operationally however the company remains committed to accelerated spending on capex, R&D that is likely to push related expenses higher in the near term. Timely launches, ramp up of biosimilars in developed as well as EMs and Syngene's performances remain key levers for the company. We change from BUY to HOLD and arrive at our revised target price of Rs. 450 (vs Rs. 500 earlier) on an SoTP basis.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Biocon_Q3FY21.pdf

Shares of BIOCON LTD. was last trading in BSE at Rs.393.8 as compared to the previous close of Rs. 441.95. The total number of shares traded during the day was 1386180 in over 39448 trades.

The stock hit an intraday high of Rs. 424 and intraday low of 386. The net turnover during the day was Rs. 556857995.

Source : Equity Bulls

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