According to the business standard, India’s pharmaceutical sector is a global powerhouse, ranking third in production volume and contributing approximately 1.72% to the GDP. With nearly 3,000 companies and over 10,500 manufacturing units, it supplies 40% of generic drugs in the US and is projected to reach $130 billion by 2030, growing at 9-11% annually.
With a market capitalization of Rs 46,175.08 crore, the shares of Biocon Ltd were trading at Rs 384.60 per share, increasing around 6 percent as compared to the previous closing price of Rs 364.80 apiece.
Reason for rise
The shares of the company have seen bullish movement after HSBC, one of the well-known brokerages globally, gave a ‘Buy’ call on the pharma stock with a target price of Rs 430 apiece, indicating a potential upside of 16 percent from Tuesday’s low of Rs 370.00 per share.
Brokerage Rationale
HSBC anticipates that Biocon’s operations will improve as a result of key biosimilar launches and a comeback in generic sales. The firm sees numerous factors supporting future earnings growth, including the FDA’s approval of Biocon’s Malaysia factory, which addresses past GMP problems.
Financial Performance
Analyzing a company’s financial performance, revenue grew by 4 percent from Rs 3,462 crore in Q2FY24 to Rs 3,590 crore in Q2FY25, during the same time frame, the company’s net profit decreased significantly by 84 percent from Rs 173 crore to Rs 27 crore.
Generics revenue fell 8% YoY to ₹624 crore, with recovery expected in H2 FY25 via new launches. Biosimilars grew 11% YoY to ₹2,182 crore, driven by the U.S. and Europe, with 15 new launches in emerging markets. Research Services revenue dipped 2% YoY to ₹891 crore but rose sequentially by 13%.
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Market Outlook
The company anticipates multiple biosimilar launches, with five expected by FY27. It is gaining market share in the U.S. and Europe, maintaining leadership in key products. Ongoing cost improvement programs aim to boost profitability and recover lost business in the Generics segment.
Strategic Focus
The company is focusing on R&D investment (7%-9% of revenues) to support pipeline growth, prioritizing debt reduction through financial restructuring, and expanding market presence in emerging markets while enhancing product offerings in established markets to drive overall growth and operational efficiency.
Company Profile
Biocon Limited focuses on treating diabetes, cancer, and autoimmune diseases. Its segment includes Generics, Biosimilars, Novel Biologic, and Research Services. It has developed and commercialized novel biologics, biosimilars, and complex small-molecule active pharmaceutical ingredients (APIs).
Written by:- Abhishek Singh
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