Biocon profit drops 51.2% to Rs81.3 crore in June quarter
Mumbai: Biocon Ltd’s consolidated net profit fell 51.2% year-on-year to Rs81.3 crore in the quarter ended June, missing analyst estimates, mainly due to weakening of the US dollar and destocking ahead of implementation of goods and services tax (GST).
The Bengaluru-based company’s sales were down 5.9% at Rs933.7 crore on account of lower sales of small molecules and branded formulations.
A Bloomberg poll of seven brokerages had pegged the company’s net profit at Rs108.4 crore and sales at Rs991.9 crore for the quarter.
Biocon’s small molecules business shrank 17% to Rs363 crore, while branded formulations sales fell 17% to Rs130 crore. However, biologics business grew 15% to Rs184 crore and research services business, which is under its listed subsidiary Syngene International, grew 6% to Rs291 crore.
“Our biologics business had a strong quarter led by insulins sales. Financial performance was muted largely due to a combination of factors: weakening of US dollar, GST impact, and inclusion of operational and fixed costs of Malaysia (manufacturing facility). Additionally, the YoY comparison was impacted by the one-time adjustment in Q1FY17 related to IndAS migration,” chairperson and managing director Kiran Mazumdar-Shaw said in a press release.
“The outlook for FY18 remains cautious as much depends on regulatory approvals and tender outcomes for our biosimilars in key emerging markets. However, we will endeavour to maintain healthy core operating margins, going forward,” she added.
Net spend on research and development (R&D) was Rs58 crore in the June quarter, 13% higher than the same period last year.
The company’s earnings before interest, tax, depreciation and amortization (Ebitda) was down 19% at Rs246 crore largely on account of inclusion costs related to Malaysian facility, and higher employee expenses.
The company’s results were declared after the closure of stock market trading hours. Shares of Biocon ended down 1.1% at Rs399.10 on the BSE, while benchmark Sensex index closed flat at 32,383.30 points.