Buy Biocon; target of Rs 760: ICICI Direct

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26 Aug, 2025 12:21

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Biocon’s Q3FY19 numbers were a comprehensive beat vis-à-vis I-direct estimates on all fronts. Revenues grew 45.6% YoY to Rs 1540.8 crore (I-direct estimate: Rs 1382.4 crore) mainly due to 136.6% YoY growth in biologics to Rs 449 crore (I-direct estimate: Rs 379.6 crore) EBITDA margins improved 375 bps YoY to 24.7% (I-direct estimate: 26.2%) mainly due to improvement in product mix. EBITDA grew 71.7% YoY to Rs 380.7 crore against I-direct estimates of Rs 362.1 crore . Adjusted net profit grew 131.6% to Rs 212.9 crore (I-direct estimate: Rs 188.7 crore) mainly due to strong operational performance and lower tax rate (16.7% vs. 25.2% in Q3FY18)

Robust Q3 performance was primarily driven by biologics segment on the back of new launches across develope• Biocon’s Q3FY19 numbers were a comprehensive beat vis-à-vis I-direct estimates on all fronts. Revenues grew 45.6% YoY to Rs 1540.8 crore (I-direct estimate: Rs 1382.4 crore) mainly due to 136.6% YoY growth in biologics to Rs 449 crore (I-direct estimate: Rs 379.6 crore) • EBITDA margins improved 375 bps YoY to 24.7% (I-direct estimate: 26.2%) mainly due to improvement in product mix. EBITDA grew 71.7% YoY to Rs 380.7 crore against I-direct estimates of Rs 362.1 crore • Adjusted net profit grew 131.6% to Rs 212.9 crore (I-direct estimate: Rs 188.7 crore) mainly due to strong operational performance and lower tax rate (16.7% vs. 25.2% in Q3FY18)d and emerging markets and geographical expansion in emerging markets. Overall, FY19 panning out on a strong footing mainly due continuous strong traction in its “growth segments” (Biologics and Syngene). Small molecules segment has also started showing promising growth. Strong growth in biologics is likely to improve overall margins as well. Thus, progress on the biosimilars regulatory front in developed markets and launches in the developed as well as emerging markets are likely to be key levers for the company. We value the stock on SOTP basis. Accordingly, we arrive at a target price of Rs 760 per share.

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