Hold Biocon; target of Rs 410: ICICIdirect

ICICIdirect.com has recommended to hold Biocon with a target price of Rs 410, in its research report dated January 27, 2015.

August 05, 2015 / 18:13 IST

26 Aug, 2025 12:21

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ICICIdirect.com's report on Biocon

Revenues grew 8.8% YoY to Rs 769.2 crore, marginally above I-direct estimate of Rs 749.5 crore. Capacity constraint and slow growth in API continued to impact the bio-pharma business, which grew just 4% to Rs 436 crore

EBITDA margins contracted 406 bps YoY to 20.8%, lower than I-direct estimate of 23% due to higher-than-expected R&D expenses. The EBITDA declined 9% to Rs 160 crore, lower than I-direct expectation of Rs 172.3 crore

Net profit declined 13.5% to Rs 90.9 crore, lower than I-direct estimate of Rs 107.2 crore

"While the biopharma segment continues to struggle for one reason or the other, the only thing that is saving the stock is contract research segment and possible listing of the same. Branded formulations are also going through portfolio restructuring to improve profitability. We do not see any major trigger in the biopharma space till FY17. Even the Malaysian facility, which will go on stream for a pilot run, is expected to see commercial launches at the end of FY17. Given the different fortunes for different segments, we have adopted the SOTP methodology. Accordingly, we have valued the three segments i.e. biopharma, branded formulations and research services separately. Our revised target price is Rs 410. Hold the stock", says ICICIdirect.com research report.