Neutral Biocon Ltd For Target Rs.400 - Motilal Oswal
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Revenue lower than our estimate; lesser than expected R&D spend led to in line EBITDA
* Revenue grew 18% YoY to INR18.4b (v/s our estimate of INR20.2b) in 4QFY21.
* Revenue growth was led by: a) Biosimilars (36% of sales) up 53% YoY to INR6.6b. b) Research services (36% sales) up 8% YoY to INR6.6b.
* However, revenue growth was dragged by Generic sales, up 3% YoY to INR5.8b (28% of sales).
* Gross margin (GM) expanded 360bp YoY to 65% due to superior product mix.
* Accordingly, EBITDA margin expanded 330bp YoY to 23.7% (v/s our estimate of 22.4%). As a percentage of sales, higher other expense (+170bp YoY) was offset by lower R&D/employee cost (-110bp/-20bp YoY).
* EBITDA grew 37% YoY to INR4.4b (v/s our expectation of INR4.5b) on a lower base.
* BIOS saw an exceptional gain of INR130m (net of insurance claim related to fire incident at Syngene and severance cost related to the exit of certain key personnel). Adjusting for the same, tax related to exceptional items, and gain of INR1.6b (fair valuation of investment in Bicara Therapeutics), PAT grew 30% to INR1.6b (v/s our estimate of INR1.9b).
* For FY21, sales/EBITDA grew 13%/3% YoY to INR71b/INR16.6b, while adjusted PAT declined 10.6% to INR6.6b.
Key highlights for 4QFY21
* The board has appointed Mr. Indranil Sen as CFO of BIOS, replacing Mr. Anupam Jindal, who resigned due to personal reasons. Mr. Sen was earlier the Vice President of Finance at BIOS.
* Biocon Biologics also appointed Mr. Susheel Umesh as Chief Commercial Officer for emerging markets.
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