Biocon Q3FY23 Earnings: Revenue up 36%, PAT falls 25% YoY
5 min read . Updated: 14 Feb 2023, 08:24 PM IST
Premium- With a market capitalization of ₹28,202.09 Cr, Biocon Ltd. is a large-cap company that engages in the pharmaceutical industry.
With a market capitalization of ₹28,202.09 Cr, Biocon Ltd. is a large-cap company that engages in the pharmaceutical industry. The firm, which produces competitive biosimilars, generic medications, and advanced APIs, is India's largest integrated biopharmaceutical company. Today, the firm announced its third-quarter earnings. The company's net revenue from operations for the quarter increased by 36% YoY to ₹3,020 Cr from ₹2,223 Cr in Q3FY22.
The company's EBITDA reached ₹723 Cr in Q3FY23 compared to ₹537 Cr in Q3FY22, representing a growth of 35% whereas EBITDA margin remains flat at 24%. The company's net R&D investments reached ₹337 Cr in Q3FY23 against ₹138 Cr, representing a YoY growth of 144%. The company declared a net profit of ₹140 Cr in the quarter ended December 2022 compared to ₹187 Cr recorded in the year-ago quarter, representing a fall of 25% YoY. Biocon said the profit was also impacted due to dilution of Biocon’s stake in Biocon Biologics and Syngene.
Kiran Mazumdar-Shaw, Executive Chairperson, Biocon and Biocon Biologics said “Q3 FY23 has been an eventful quarter which saw the completion of the global acquisition of our partnered Biosimilars business from Viatris on Nov 29, 2022. We are now implementing country-wise integration of the business to maximize the value of the combined entity to propel growth. Biosimilars as a business segment offers differentiated growth to Biocon Biologics based on vertical integration and a unique portfolio of Insulins and antibody based immunotherapeutics. This quarter captures a fraction of the acquired business, but from Q4FY23 onwards, the financials will recognise the entire Biosimilars business."
“Biocon’s consolidated revenues for the quarter grew 36% to ₹3,020 crore on the back of robust performance across all its three businesses. The biggest contribution came from the Biosimilars business, which reported a 54% increase in revenues to ₹1,507 crore. Research Services revenues at ₹786 crore and Generics business revenues at ₹718 crore, grew 23% and 18%, respectively. The advancement of our research pipeline led to ₹337 crore Net R&D investments this quarter, which will drive Biocon’s future growth. We reported a strong EBITDA growth of 35% to ₹723 crore, representing a healthy EBITDA margin of 24%. Core EBITDA grew 49% to ₹1,069 crore. As a part of our strategy to reduce the acquisition debt, Biocon has raised funds through a partial divestment of its stake in Syngene. We expect to end FY23 on a strong note with healthy growth across businesses. Biocon Biologics is tracking towards exiting the year at a USD 1 billion trajectory, excluding vaccines," said Kiran Mazumdar-Shaw.
The company's income from Generics business stood at ₹718 Cr in Q3FY23 compared to ₹607 Cr, representing a growth of 18%, whereas its income from Biosimilars business stood at ₹1,507 Cr up by 54% YoY from ₹981 Cr stood in the year-ago quarter. Biocon said its income from Research services business reached ₹786 Cr in Q3FY23 up by 23% from ₹641 Cr in Q3FY22.
“The Generics business’ third-quarter results were in line with our expectations, delivering healthy sequential and year-on-year revenue growth. The performance was driven by immunosuppressant API sales and Generic Formulations, which saw an uptick in the sales of statins as well as recent product launches. Margins, compared to the previous year, were muted by the product mix and continuing pricing pressure in the U.S. market. “Our geographical expansion continued to gain traction with the signing of a partnership agreement with Zentiva for commercializing Liraglutide in Europe, as well as a long-term strategic partnership with Farmanguinhos in Brazil for the supply and tech-transfer of a finished dose formulation immunosuppressant product. These partnerships will contribute towards attaining mid-teens growth in the short to medium term. We also secured approvals for some of our key formulation products in Europe. Our focus remains on geographical expansion, new product launches, strengthening our product pipeline and executing on key capex projects," said Siddharth Mittal, CEO & Managing Director, Biocon Limited.
“Biocon Biologics recorded its highest ever quarterly revenue of ₹1,507 crore, reflecting a growth of 54% on the back of our acquisition of Viatris' biosimilars business and continued growth in BBL led markets. This strong performance has translated to an EBITDA growth of 53% to ₹361 crore. This landmark acquisition marks an inflection point in our transformational journey and positions Biocon Biologics as a unique, fully integrated, leading global biosimilars enterprise," said Shreehas Tambe, CEO & Managing Director, Biocon Biologics Ltd.
“While our biosimilars portfolio continues to gain market share in the U.S. and EU, our business in the Emerging Markets is also on a growth trajectory with product launches in 8 new markets this quarter. We have drawn up a comprehensive plan to integrate the acquired Viatris business into Biocon Biologics and migration of business operations is scheduled in a phased manner to ensure business continuity and uninterrupted service to customers and patients," said Shreehas Tambe.
“We continue to see good demand in the main client markets of U.S. and Europe which - combined with strong execution and forward planning - has helped us deliver solid revenue growth in the third quarter. We are pleased to report positive performances from all divisions this quarter. Growth in our research divisions, Discovery Services and the Dedicated Centres, was solid. In Development Services, repeat orders from existing clients, as well as an increase in the number of collaborations with emerging biopharma companies drove a robust performance. In Manufacturing, the highlight of the quarter was the successful inspection of our biologics facilities by the U.S. FDA, EMA and MHRA. Based on our strong performance to date, we are confident of meeting the upgraded annual revenue growth guidance of high teens," said Jonathan Hunt, CEO & Managing Director, Syngene.
To partially fund the USD 650 million equity infusion into Biocon Biologics, Biocon Ltd. raised USD 420 million in mezzanine financing. With Kotak Strategic Situations Fund, Biocon Limited has signed a legally binding agreement for structured fundraising of up to ₹1200 crore. With effect from December 5, 2022, Shreehas Tambe will serve as CEO & Managing Director on the board of directors of Biocon Biologics Ltd.
The shares of Biocon Limited closed today on the NSE at ₹234.35 apiece, down by 1.41% from the previous close of ₹237.70.
