Profit Rises 71%, But Misses Estimates

Biocon Ltd.’s first-quarter profit rose on higher sales and lower taxes. Still, its earnings missed forecasts.

Net profit of the Bengaluru-based drugmaker surged 71% year-on-year to Rs 144 crore in the three months through June, according to its exchange filing. That compares with the Rs 236-crore consensus estimate of analysts tracked by Bloomberg.

Sequentially, profits fell 39%.

Biocon Q1 Highlights (YoY)

• Revenue rose 22% to Rs 2,140 crore, against the estimated Rs 2,354 crore.

• Operating profit was up 3% to Rs 399 crore, compared with the Rs 560-crore forecast.

• Operating margin stood at 18.7% against 22.1% a year ago, and an estimate of 23.8%.

• Taxes are down 49% to Rs 30 crore.

Other Highlights (YoY)

• Revenue from generics saw a growth of 19% and contributed to 26% of the total revenue.

• Biosimilars (Biocon Biologics Ltd.) reported growth of 29% at Rs 977 crore, accounting for 45% of the revenue.

• Research services reported a growth of 8% and made up for 29% of the quarterly revenue.

• There was no revenue from novel biologics during this quarter.

Kiran Mazumdar-Shaw, executive chairperson at Biocon and Biocon Biologics, said in the exchange filing that they have had a strong start to the year.

“Our financial performance this quarter includes the impact of annual increments in personnel costs as well as increased input and freight costs, pursuant to pandemic and geopolitical disruptions of global supply chains.”

According to her, the three businesses—Biocon Generics, Biocon Biologics and Syngene—are “poised for the next phase of strong and sustainable growth” after facing challenges during the two years of the pandemic.

Research and development investments increased significantly by Rs 87 crore in this quarter, reflecting pipeline progression to deliver future growth, she said.

Of this, Biocon Biologics’ R&D investments this quarter grew by 120% year-on-year to Rs 130 crore, representing 13% of its revenue.

Dr Arun Chandavarkar, managing director at Biocon Biologics, said that the strategic alliance with Serum Institute Life Sciences for vaccines and the acquisition of Viatris Inc.’s global biosimilars business “are on track for closure in the second half of this calendar year”.

Shares of Biocon closed 1.59% higher before the results were announced compared with a 0.99% rise in the benchmark Sensex.