ICICI Direct has given Hold recommendation for Biocon with a target price of Rs. 400 in its research report issued on Apr 29, 2021
ICICI Direct’s research report on Biocon
Q4FY21 revenues grew 16.3% YoY to Rs 1839 crore. Biosimilars grew 53.2% YoY to Rs 664 crore due to low base effect. Research services segment grew 8.4% YoY at Rs 659 crore. Generic sales grew 2.7% YoY to Rs 578 crore due to pricing pressure and stockpiling by customers in H1FY21. EBITDA margins improved 355 bps YoY to 23.7% mainly due to strong gross margins and lower R&D cost. EBITDA grew 36.8% YoY to Rs 436 crore vs. I-direct estimate of Rs 470 crore. Adjusted PAT grew 96.6% YoY to Rs 243 crore. Delta vis-à-vis EBITDA was due to higher other income, which included Rs 160 crore gain from fair valuation of Bicara Therapeutics.
We maintain HOLD and arrive at our revised target price of Rs 400 (vs. Rs 450 earlier) on an SoTP basis.