Biocon Ltd - Q1FY21 Result Update - ICICI Securities

Q1FY21 revenues grew 14% YoY to Rs. 1671 crore (I-direct estimate: Rs. 1651 crore) mainly due to 18.9% YoY growth in biosimilars to Rs. 692 crore. The Generics segment grew 16.1% YoY to Rs. 599 crore. Research services segment remained flat YoY at Rs. 422 crore. EBITDA margins contracted 512 bps YoY to 24.7% (I-direct estimate: 22.2%) mainly due to lower gross margins and higher R&D costs. EBITDA declined 5.5% YoY to Rs. 413 crore against I-direct estimate of Rs. 366 crore. Adjusted PAT declined 27.6% YoY to Rs. 149 crore (I-direct estimate: Rs. 127 crore). Delta vis-à-vis EBITDA was due to higher depreciation and lower other income.

Valuation & Outlook

As guided by the management at Q4 conference call, Q1 numbers demonstrated visible recovery with operations coming back to pre-Covid level in most of the aspects. The management has reiterated the US$1 billion target for biosimilars by FY22. This is based on a strong pipeline and expected new launches in key markets, especially the US. Similarly, we are getting visibility for scenario beyond FY23 for number of launches. The company remains committed on accelerated spending towards capex and R&D that is likely to push related expenses higher in the near term. Timely launches and ramp up of biosimilars in developed as well as EMs and Syngene's performances remain key levers for the company. We arrive at our revised target price of Rs. 490 on an SoTP basis. Despite recent run up the stock remains a compelling bet based on improved scalability and visibility.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Biocon_Q1FY21.pdf

Shares of BIOCON LTD. was last trading in BSE at Rs.415.15 as compared to the previous close of Rs. 430.3. The total number of shares traded during the day was 391484 in over 7263 trades.

The stock hit an intraday high of Rs. 435.45 and intraday low of 413.75. The net turnover during the day was Rs. 165348421.

Source : Equity Bulls

Keywords