Dolat Capital's research report on Biocon
Biocon 2QFY17 result has been a mix bag coupled with almost in-line bottom line while our top line was missed. Our outlook on the stock remains positive and on track key filing timelines (to be filed in 2HFY17) adds further confirmation to our earnings trajectory. Currently company has filed Pegfilgrastim and Trastuzumab in Europe with EMA. Biocon also received tentative approval for Rosuvastatin in US market which will earmark its first ever generic launch in the US markets and also plans for another generic launch of gCopaxone (20mg, 2HFY17). The biosimilar launchesin emerging markets (outside India) and branded formulation in India are expected to drive traction for earnings to meet the FY19 guidance of US$ 1 bn along with Malaysian facility coming on stream from 2HFY17.
Biocon is the only well-equipped player from Indian pharma to participate in first wave of biosimilar launch (market size of nearly US$ 40 bn) with four advance stage products in the pipeline. We believe in the coming 2-3 years company’s past investments will start bearing the expected results. We remain positive on company’s earnings course, and maintain our BUY rating with target price of Rs 1200. Current stock price of Rs 1006 trades at 31x FY17E EPS of ` 32.7 and 24x FY18E EPS of Rs 42.7.
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