Biocon Q1 net may rise 8.5% at Rs 85.5 cr: Motilal Oswal
Motilal Oswal expects Biocon to report a 55.3 percent degrowth quarter-on-quarter (growth of 8.5 percent year-on-year) in net profit at Rs 85.5 crore.
July 24, 2013 / 17:18 IST
Motilal Oswal has come out with its first quarter (April-June) earnings estimates for the healthcare sector. The brokerage house expects Biocon to report a 55.3 percent degrowth quarter-on-quarter (growth of 8.5 percent year-on-year) in net profit at Rs 85.5 crore.
Revenues are expected to increase by 9.8 percent Q-o-Q (up 18.8 percent Y-o-Y) to Rs 685.4 crore, according to Motilal Oswal.Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 37.1 percent Q-o-Q (up 16.7 percent Y-o-Y) to Rs 143.2 crore.Motilal Oswal report on BioconWe expect Biocon's top line to grow 19 percent Y-o-Y to INR6.85 billion, led by 26 percent growth in CRO division. Biopharma division is expected to grow 16 percent. We expect licensing income at INR211 million, up 52 percent Y-o-Y. EBITDA would grow just 16.7 percent Y-o-Y to INR1.43 billion and EBITDA margin would shrink 40bp to 20.9 percent due to high R&D costs and adverse sales mix (falling profitability of statins portfolio). We expect adjusted PAT to grow 8.5 percent Y-o-Y to INR855 million on account of higher tax rate. Key growth drivers for FY14E/15E will be 1) traction in insulin initiative in RoW, 2) ramp-up in CRO division, 3) contribution from immunosuppressants supplies and 4) branded formulations. However, high R&D costs and long term capex in the near term will exert pressure on profitability and return ratios. The stock trades at 16x FY14E and 14.1x FY15E earnings. Option values for the future include separate listing of Contract Research business and potential out-licensing of the Oral Insulin NCE by BMS. Return ratios are likely to remain subdued, with both RoE and RoCE in the 13-14 percent range from FY13 to FY15E. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
