Company Update : Biocon Ltd by Motilal Oswal Financial Services Ltd
Operationally in line; lower minority interest leads to better than expected PAT
* BIOS 2QFY26 revenue grew 20% YoY to INR43.0b (est. INR41.4b).
** Revenue growth was led by Biosimilars (62% of sales), up 25% YoY to INR27.2b; Research services (21% of sales), up 2% YoY to INR9.1b; Generics (17% of sales), sales up 24% YoY to INR7.7b.
* Gross margin (GM) contracted 280bp YoY to 61.6%.
* EBITDA margin expanded 30bp YoY to 19.4% (est: 20.2%), led by better operating leverage (employee expense/other expense down 130bp/210bp YoY as % of sales). R&D cost inched up (30bp YoY as % of sales) for the quarter.
* EBITDA grew 21.6% YoY to INR8.4b (est: INR8.4b).
* PBT came in below estimates, due to higher finance costs and depreciation in the quarter.
* BIOS had an exceptional expense of INR291m related to the settlement of litigation. Pursuant to the settlement, the amount disclosed under ‘other expense’ in 1QFY26 has been re-classified to an exceptional item.
* Adj. for the same, PAT at INR910m (est. INR700m) was higher than expected majorly due to substantially lower minority interest of INR480m (est. INR1,135m) for the quarter.
* Revenue/EBITDA largely in line with BBG estimates (+3%/+1%), while PAT missed estimates by 18%.
* In 1HFY26, revenue/EBITDA grew 17%/22% YoY, while PAT came in at INR1.2b from a loss of INR1.2b in 1HFY25.
Other key highlights
* BIOS obtained 13 new approvals and launched 19 biosimilar products across key markets during the quarter.
* The company won its first global Phase III clinical trial mandate from a USbased biotech firm, with patient recruitment planned across sites in India and the US.
* Syngene (CRDMO) broadened its clinical trial presence during the quarter, adding Australia, New Zealand, the UK, Sri Lanka, and Eastern Europe to its network.
* The company commissioned its first US manufacturing facility in Cranbury, New Jersey, in Sep’25. The oral solid dosage (OSD) plant, built with an investment of over USD30m, has an annual capacity of 2b tablets. ? BIOS used QIP proceeds to settle its structured debt obligations with Goldman Sachs and Kotak.
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