Hold Biocon; target of Rs 230: ICICI Securities

ICICI Securities recommended hold rating on Biocon with a target price of Rs 230 in its research report dated August 13, 2023.

Broker Research

August 18, 2023 / 10:38 IST

Hold

26 Aug, 2025 12:21

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ICICI Securities' research report on Biocon

Biocon’s Q1FY24 performance was dragged by the biologics biz. Profitability of the segment was under pressure owing higher rebates in Fulphila (USD 15mn). Segmental PBT dropped 600bps QoQ to 1.6% in Q1FY24. US market share of Fulphila and Ogivri expanded by 200bps and 100bps QoQ to 16% and 11%, and stable at 12% for bGlargine. Launch of Hulio in the US and new supply agreements are expected to boost growth ahead. Management expects core margins of biologics to return to 30% levels by end of FY24. We remain wary on the costs involved in running the US front end and the challenges pertaining to pricing of biosimilars across US and Europe.

Outlook

We cut our EBITDA estimates for FY24E/FY25E by 13%/12% due to pressure on realisations, and revise the target price to INR 230. Downgrade to REDUCE (earlier: HOLD).

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