Biocon - Q4FY22 First Cut - ICICI Direct

(CMP - Rs. 376, Market Cap - Rs. 45203 crore)

Biocon's Q4FY22 revenues were above estimates driven by strong performance across all segments while margins were in-line. Revenues for FY22 stood at Rs. 8184 crore (up 15%) and EBITDA margins for FY22 at 23.4%.

Q4FY22 earnings summary

- Revenues grew 31% YoY to Rs. 2409 crore (I-direct estimate: Rs. 2293 crore). Biosimilars grew 48% YoY to Rs. 982 crore, better than I-direct estimates of Rs. 960 crore on back of improved performance across geographies and market share gains by interchangeable bGlargine in US. Research Services segment grew 15% YoY at Rs. 758 crore, above I-direct estimates of Rs. 704 crore driven by strong quarter for Development services as it caught up on postponed projects in addition to planned work while Generic sales increased 26% YoY to Rs. 717 crore (I-direct estimate: Rs. 616 crore) driven by contribution from new launch of Everolimus in US, uptick in API business and normalization of supply challenges

- EBITDA margins came in-line with our expectations amid a 91 bps YoY improvement to 24.6% (I-direct estimate: 24.5%) mainly due to decline in gross margin (down 296 bps YoY) at 65.6% and higher other expenditure being offset by lower employee cost. Overall EBITDA improved 36% YoY to Rs. 592 crore as against I-direct estimate of Rs. 562 crore

- Adjusted PAT de-grew 5.8% YoY to Rs. 239 crore (I-direct estimate: Rs. 238 crore). Delta vis-a vis EBITDA was on account of lower other income and higher depreciation being partially offset by lower interest and tax expense

In Generics, Biocon's focus is on expediting product pipeline (launched Posaconazole and Dorzolamide in US) and operationalizing new capacities (Vizag API facility in FY23). On Biosimilars front, two strategic transactions with Serum and Viatris are likely to contribute from H2FY22 while timely launches and ramp up of Biosimilars in the developed as well as emerging markets remain key to capture market share in the projected 3.3x increase in Biocon's target addressable market from US$21 billion in FY22 to US$69 billion in FY26. Syngene's ability to take advantage in CRAMS space with operating leverage will also be important factor for the company. We will come out with an update post discussion with the management.

Shares of Biocon Limited was last trading in BSE at Rs. 368.45 as compared to the previous close of Rs. 376.50. The total number of shares traded during the day was 111730 in over 2766 trades.

The stock hit an intraday high of Rs. 381.60 and intraday low of 367.20. The net turnover during the day was Rs. 41728800.00.

Source : Equity Bulls

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Biocon INE376G01013 Q4FY22 ResultUpdate ICICIDirect