Motilal Oswal: Biocon Q1 Logs Healthy Recovery In Biologics; Improved Demand Scenario For Generics
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Motilal Oswal Report
Biocon Ltd. reported a 14.6% YoY increase in revenue to Rs 16.7 billion (in-line) in Q1 FY21, primarily led by:
a) 16% YoY growth in Generics (36% of sales) and b) a 19%/60% YoY/QoQ increase in Biosimilars to Rs 7 billion (41% of sales). Growth was dragged down by a flat Research Services at Rs 4.2 billion (23% of sales).
The gross margin (GM) contracted 290 basis point YoY to 63.9%. The Ebitda margin contracted at a higher rate of 530 basis point YoY to 24.7% (our estimate in-line).
This was attributed to a change in the product mix and an increase in other expenses / research and development cost / employee cost (up 120 basis point/ up 100 basis point/ up 30 basis point YoY as a percentage of sales).
Ebitda was down 5.6% YoY to Rs 4.1 billion (our estimate in-line) for the quarter. Profit after tax declined at a higher rate of 27.8% YoY to Rs 1.5 billion (our estimate Rs 1.9 billion), weighed by higher depreciation and tax rate.
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