Biocon Limited is an Indian biopharmaceutical company that specialises in manufacturing generic active pharmaceutical ingredients (APIs), along with novel biologics, antibodies, and biosimilar insulins.
The market cap of Biocon Limited as of March 2018 is more than Rs.35,000 crore.
Company’s Wealth and Recent PerformanceBiocon Q1 FY 2018-19 Results
- The biopharmaceutical company reported a 47% increase in its consolidated net profit at Rs.120 crore for the said quarter attributed by the strong performance across segments. The company had posted Rs.81 crore during the same period last fiscal.
- The total revenue rose by 21% to stand at Rs.1,193 crore for the quarter while it was Rs.988 crore during Q1 FY18.
- The robust performance was led by a 36% incline on biologics business and a 39% rise in research services revenues.
- EBITDA rose by 23.8% year-on-year to stand at Rs.237.8 crore, while the EBITDA margins stood at 21.2% compared to 19.9% reported during Q4 FY18 and 20.7% posted in Q1 FY18.
- The Profit After Tax (PAT) inclined by 47.2% year-on-year to stand at Rs.119.7% in Q1 FY19 as against Rs.81.3 crore during the said quarter.
- For the financial year 2017-18, the company reported its net profit declined by 39% to stand at Rs.372 crore as against Rs.612 crore reported in FY 2016-17.
- The total revenue for the said fiscal inclined by 6% to stand at Rs.4,336 crore as against Rs.4,079 crore during the previous fiscal.
- However, the total revenue grew by 6% to stand at Rs.4,336 crore as compared to Rs.4,079 crore during the previous fiscal.
- The company said that the muted performance was due to continued pricing challenges in the generics business along with a planned plant shut down. Also, the operational expenses related to their Malaysian plant impacted the bottom line.
- The biotechnology major posted about 2% incline in its net profit for the said quarter to stand at Rs.130 crore as against Rs.127 crore reported during the same period last fiscal.
- The company’s total revenue for the said quarter inclined by 27% to stand at Rs.1,237 crore as against Rs.974 crore for the same quarter last financial year.
- As for its EBITDA, it grew by 25% year-on-year to stand at Rs.233 crore, while the margin was 20% compared to 20.3% in the same period last fiscal and 21% in the previous quarter.
- The firm reported a rise in its Profit After Tax by 2.3% year-on-year to stand at Rs.130.4 crore.
- The strong performance for the said quarter was led by the growth in biologics and research services business.
- Biocon’s revenue from operations increased by a feeble 1% over the September quarter. However, its total revenue for the third quarter stood at Rs.1,092 crore - the exact figure Biocon achieved in Q3 FY17. Similarly, licensing income and other income also declined, thus impacting the financial performance in the December quarter.
- Its EBITDA for the third quarter is Rs.256 crore whereas net profit is Rs.92 crore. However, after comparing these figures with the ones from the Q3 FY17 results, it is observed that there’s been a respective decline in the two 21% and 46%. This reduction in profit was driven by an increase in interest and depreciation costs to Rs.112 crore, the majority of which is attributable to Malaysia.
- However, the company made up for this loss in performance through regulatory advancements in biologics business over the course of December quarter. This involves the collaboration with Sandoz on a global scale to develop, manufacture, and commercialise biosimilars. In this period, Biocon also became the first Indian company to get its biosimilar certified by USFDA.
Biocon Stock Trends in 2018
- The opening price of Biocon stock on January 1 on NSE was Rs.540.15 and approximately the same on BSE. Following the announcement of Sandoz deal, the stock price hit a 52-week high and for a short while, shares were trading at around Rs.640. However, the share price of Biocon dipped slightly after the Q3 FY18 results were announced. The closing price at the end of the month was Rs.614.90 on NSE.
- The opening price on February 1 was Rs.616 on NSE. Owing to weak global cues, the share price of the company went below Rs.600 on NSE and BSE. Nonetheless, stocks managed to make a steady recovery and by the end of the month, Biocon share price was over Rs.600 again. The closing price on February 28 was Rs.630.
- When the market opened for trading on the 1st of March, the stock lost about 5 points to end the day at Rs.626.85 and continued to lose points nearly 50 points to end at Rs.571.20 on the 23rd before recovering slightly to end the month at Rs.593.90.
- The scrip moved upwards by about 5 points on the 2nd of April to be valued at the end of the day at Rs.598.50 and inclined significantly over the course of the month to end at Rs.667.60.
- On the 2nd of May, the stock lost 5 points to end at Rs.663.95, while it dropped to Rs.622.65 on the 8th, it recovered to end the month at Rs.674.90 gaining more than 50 points by the end of the month.
- The company’s stock price declined by more than 16 points to end at Rs.649.00 on the 1st of June only to drop further by nearly 40 points on the 6th to be valued at Rs.608.35; however, by the end of the month, the scrip gained to end at Rs.619.55.
- The stock lost about 3 points on the 2nd of July to end the day at Rs.615.95 before it went on a losing streak by more than 70 points to stand at Rs.553.30 on the 25th only to gain slightly to end the month at Rs.586.40.
- On the 1st of August, Biocon stock price stood at Rs.583.35 and remained stable over the course of the month before gaining more than 40 points to end the month at Rs.624.00.
Biocon Limited Stock Trends in 2016 and 2017
- Biocon share price at the start of 2016 was close to Rs.170 on NSE and BSE. By the end of February, the share price had gone down and was trading at roughly around Rs.150. In March, a dividend of 100% was announced by the company which, in conjunction with business developments in international markets, gave the price a steady heading.
- In early April, stocks were changing hands at roughly around Rs.160. Through most of April, May, and June, the share price continued to rise steadily driven by company updates and a buoyant market. By early May, the share price had crossed Rs.200. The closing price at the end of June 2016, was roughly Rs.247 on NSE and BSE.
- The price dipped slightly in early July but following the announcement of Q1 results and business updates, Biocon stocks by the end of the month were trading at around Rs.270. This upward rally was seen in August and September as well and during this time, the stock price managed to cross Rs.300.
- Biocon released its Q2 FY17 results in October which helped the stocks gain more momentum and hit a new 52-week high. In November, post demonetisation, the share price dipped slightly. However, by December, the stock managed to recover its previous losses. Driven by positive updates, the closing price at the end of December was roughly Rs.316 on NSE and BSE.
- At the start of January 2017, Biocon shares were being traded at around Rs.315. By late February, the shares had touched Rs.370 on the back of USFDA accepting the company’s Biologics License Application. The closing price at the end of March was approximately Rs.379.
- In April, Biocon stocks hit a record high on the announcement of bonus issues. Through May, however, the share price went down gradually. In mid-June, bonus shares were issued in 1:2 ratio which, coupled with other developments, kept the stock price steadily above Rs.300. A final dividend of 20% was announced in July. The stock price crossed Rs.400 during this time but owing to a poor performance in Q1, the share price fell.
- Biocon stocks suffered even more in August following the observations from the USFDA. This led the shares to be traded at around Rs.330-Rs.340 towards the end of August. In September, the price recovered slightly but it was not until October that the shares received a substantial boost. After USFDA issued CRL for the proposed biosimilar, the stocks once again found themselves being traded at around Rs.370.
- In November, the share price crossed Rs.400 on the back of positive developments and updates released by the company. In early December, the share price crossed Rs.500 after Biocon’s anti-cancer drug was approved by USFDA. The closing price at the end of the year was roughly Rs.537 on NSE and BSE.
Should you invest in Biocon?
- Biocon is one of the largest biopharmaceutical companies in the world. The company’s sales have increased steadily over the years which, in turn, translates into a gradual increase in profit. In addition to this, the company’s share price has quadrupled since the start of 2016 to its present value.
- The company is expanding its capabilities and expanding rapidly into international markets. This includes developing generic APIs, which, in comparison to their patented counterparts, are produced at lower costs and as a result, are able to maintain the profitability at a lower price. Over the course of last two years, USFDA has approved many biologics license applications and biosimilars applications submitted by Biocon. These were few of the factors that led to the surge in stock price, and this is expected to continue in the foreseeable future as well.
- Biocon is fundamentally strong in terms of financial performance and is highly R&D oriented. It has a publicly listed subsidiary named Syngene International Limited that is tasked with end-to-end drug discovery, research, and development. As the company grows and unfolds its potential across all its major verticals, we can expect it boost its product offerings. Therefore, from a long-term perspective, investing in Biocon may appear to be feasible. However, it is advisable to consult your financial planner before investing.
Biocon Limited is a leading biopharmaceutical company in Asia. Headquartered in Bangalore, India, the company specialises in manufacturing generic APIs that are sold in more than 120 nations across the world, including the developed markets of the U.S.A and Europe. Additionally, the company produces novel biologics and biosimilar products, which are sold in bulk and formulation forms. It is the largest biopharmaceutical company in the country that develops biopharmaceuticals for cancer, diabetes, and autoimmune conditions at affordable prices.
History of the Company
Biocon was founded on November 29, 1978, with a starting capital of just Rs.10,000. Biocon India started out as a joint venture between Biocon Biochemicals Limited, Ireland, and an Indian entrepreneur named Kiran Mazumdar-Shaw. Back then, it was focussed on manufacturing enzymes exporting them to other industries across the world, including those in the USA and Europe. In 1989, Unilever acquired Biocon Biochemicals Limited.
As the company grew over the years, it shifted its focus from enzymes to biopharmaceuticals. Following this shift, Unilever sold its stake in Biocon, making it an independent entity. In the early 1990s, Biocon also established a custom research company named Syngene International Private Limited to address the need for research in the pharmaceutical sector.
In 2004, Biocon entered the stock markets following its successful IPO and at the end of its first day on bourses, it had a market value of roughly $1.1 billion. Through the years, it signed pacts with various international entities and came up with several life-saving biosimilars and generics that boosted its portfolio.
Ms. Kiran Mazumdar-Shaw - Chairperson and Managing Director
Ms. Kiran is a first generation entrepreneur with more than 40 years of experience in the field of biotechnology. She started Biocon India in the garage of her rented house with a starting capital of just Rs.10,000. In her starting years, she faced several difficulties but she managed to move beyond those and became a formidable force in the industry. She spearheaded the expansion of the company and transformed it into a fully-fledged biopharmaceutical enterprise with a focus on diabetes, oncology, and autoimmune diseases.
She has won several awards, the most notable of which are the Padma Shri and Padma Bhushan. She also received the Othmer Gold Award in 2014 for contributions towards the progress of chemistry and science. In addition to this, she is also the chairperson of the Indian Institute of Management, Bangalore.
Dr. Arjun Chandavarkar - Chief Executive Officer and Joint Managing Director
Mr. Chandavarkar holds a degree in Chemical Engineering from the IIT, Mumbai and also has a Ph.D. in Biochemical Engineering from MIT, Cambridge, U.S.A. His knowledge and vision have played an instrumental role in the growth of Biocon Limited. He has been with the company for more than 26 years and has paved way for crucial projects in that time.
Biocon Limited Listings in NSE, BSE, and Indices
Biocon shares are available for trading on the National Stock Exchange and the Bombay Stock Exchange. Its shares can be bought and sold in any of these markets during the working hours. The codes for the same are:
BSE - 532523
NSE - BIOCON
ISIN - INE376G01013
Sector - Pharmaceuticals
Coming to the stock market indices, the company is a part of S&P BSE 500, S&P BSE 200, NIFTY 200, NIFTY 500, NIFTY Alpha 50, NIFTY Midcap 50, and many more.
20th KM, Hosur Road,
Bengaluru - India, 560-010
Contact number: +91-80-28082808
Stocks vs. Mutual Funds: here's what we recommend
Stock market investments require a lot of research and knowledge. They do not generally offer any tax benefits and are regarded as high-risk investments. Hence,it is crucial to have a diversified portfolio. At Bankbazaar, we encourage our readers to invest on mutual funds . It doesn't require a lot of knowledge and equity linked mutual fund schemes offer tax benefits. Additionally, since mutual funds comprise stocks from multiple companies, they help in building a diversified portfolio.