- 31 Oct 2024
- ICICI Securities
BIOCON Q2FY25 RESULTS- SOFT QUARTER WITH SUBDUED MARGINS; FUTURE EVENTS TO BE CRITICAL
News: Revenues grew 4% YoY to ₹ 3590 crore as growth in Biosimilars pulled down by generics and Syngene. Biosimilars grew ~11% (19% like to like) to ₹ 2182 crore, Research Services (Syngene) de-grew 2% to ₹ 891 crore, while Generic sales de-grew 8% to ₹ 624 crore. EBITDA stood at ₹ 685 core, a de-growth of 18% mainly due to higher employee expenses (Viatris integration) and other expenses even as R&D spend was significantly lower. EBITDA margins stood at 19.1% during the quarter (~233 bps lower).
Views: The only solace was better traction in Biosimilars driven by market share gains in key biosimilars in the US and other markets. Syngene performance was weak because of the funding challenges in the US biotech space. Generics were softer due to significant price erosion in the API space. There was also pressure on margins due to higher employees and other expenses mainly on account of higher integration related overheads. Going ahead, launch momentum in the Biosimilars, Syngene’s revival, Formulation launches in Generics including global GLP-1 opportunities and outcome of critical plant inspections would be key things to watch out especially in the back-drop huge debt servicing.
Impact: Neutral