Axis Direct's research report on Biocon
Q1FY18 PAT was 10% below our estimates. Higher costs led by commissioning of Malaysia facility were expected, but lower revenue growth led by 17% YoY decline in small molecule and branded formulations was a negative surprise. Biocon remains confident of FY19 revenue guidance of USD 200mn for bio similar sales – implying 57% CAGR over FY17-19E – mostly from EMs and small portion from EU. Progress on TAD’s of Trastuzumab & Peg-filgrastim, regulatory clearance on its mab & insulin facility and filing of Glargine in US – key catalysts.
Outlook
We believe earnings will see inflection point from FY20 with monetization of its bio similar pipeline in the US/EU -- expected to be ~2x by FY20 over FY17 base. Maintain BUY with TP of Rs 450 (38x FY19E EPS) with improving regulatory pathway unlocking value of biosimilar players – Celltrion (trading at 30x CY18 EPS), Samsung Biologics (138x CY18 EPS) as per BBG estimates.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
Read More
