Biocon hits over two-year low; slips 18% in six weeks post weak Q4 results

In the past one year, the stock has slipped 22 per cent, as against a 39 per cent rally in the S&P BSE Sensex.

The share price of Biocon hit an over two-year low of Rs 312, down 1.5 per cent on the BSE in Wednesday’s intra-day trade. In the past six weeks, shares of the pharmaceutical company has declined 18 per cent after it reported a 4 per cent year-on-year (YoY) fall in consolidated net profit to Rs 283.9 crore in Q4FY22. 

It had posted a consolidated net profit of Rs 296.4 crore in the same quarter previous fiscal.

Consolidated revenue from operations in Q4FY22 rose 31 per cent YoY at Rs 2,409 crore as against Rs 1,842 crore in the year-ago period.

In the past one month, Biocon has underperformed the market by falling 10 per cent as compared to a 1 per cent rise in the S&P BSE Sensex. In the last one year, it has slipped 22 per cent, as against a 39 per cent rally in the benchmark index. The stock was trading at its lowest level since April 2020 on Wednesday. 

However, analysts at Nirmal Bang Equities said Biocon has multiple opportunities in the near to medium term to build on. These include Serum Vaccine distribution alliance, launch of multiple biosimilars - bevacizumab, insulin aspart and adalimumab.

The Serum vaccine distribution alliance is expected to start contributing to the topline from 2HFY23 and potentially Novavax (COVID vaccine) could be the vaccine that Biocon may start with. The new manufacturing facility for immunosuppressant is also expected to be commercialized in FY23, wherein the company has invested around Rs 500 crore, the brokerage said. 

Biocon aspires to become a globally dominant manufacturer of immunosuppressants API. Among the limited competition high value opportunities in the US market on the small molecule front, gRevlimd and gCopaxone are the ones that are lined up, the it added in a management meeting update.