Q2 Results: Higher R&D Expenses Impacted Performance, Says Biocon’s Shaw
Biocon’s operating margin may improve in the next few quarters, says Shaw.
Biocon Ltd.’s operational metrics were affected by higher research and development spends and talent acquisition costs. That’s according to its Chairperson and Managing Director Kiran Mazumdar Shaw.
“There is a significant surge in R&D spending but that has to be looked at positively as it is very reflective of our future growth,” Shaw told BloombergQuint in an interview. “Also, employee costs have gone up as the company needs global talent to pursue its strategies.”
The company’s research and development costs rose 35 percent to Rs 104 crore in the quarter, Shaw said, adding that operating margin is expected to expand over the next two quarters. The drugmaker’s employee benefit costs jumped 23 percent to Rs 353 crore, according to the exchange filing.
Shares of the biotechnology firm fell 6.6 percent intraday, its biggest fall in three months, compared to a 0.2 percent fall in the Nifty Index.
Other Highlights:
- Revenue rose 19 percent to Rs 1,572.2 crore.
- Net profit declined 39.2 percent to Rs 215.7 crore
- Ebitda rose 18.6 percent to Rs 402.8 crore.
- Margin at 25.6 percent vs 25.7 percent.
- Exceptional gain of Rs 67.5 crore versus Rs 188.8 crore.