Buy Biocon, target price Rs 375: JM Financial

JM Financial has buy call on Biocon with a target price of Rs 375. The current market price of Biocon is Rs 240.2. Time period given by analyst is 12 months when Biocon's price can reach defined target.

Biocon, incorporated in the year 1978, is a Large Cap company (having a market cap of Rs 28934.46 Crore) operating in Pharmaceuticals sector.

Biocon key Products/Revenue Segments include Bio Pharmaceuticals, Other Operating Revenue, Waste and Sale of services for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 2384.20 Crore, up 7.52 % from last quarter Total Income of Rs 2217.40 Crore and up 22.56 % from last year same quarter Total Income of Rs 1945.30 Crore. Company has reported net profit after tax of Rs 110.10 Crore in latest quarter.

The company’s top management includes Mr.Siddharth Mittal, Ms.Kiran Mazumdar Shaw, Mr.John Shaw, Prof.Ravi Mazumdar, Dr.Vijay Kuchroo, Mr.M Damodaran, Mr.Bobby Kanubhai Parikh. Company has B S R & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 120 Crore shares outstanding.

Investment RationaleThe brokerage noted that Biocon Biologics has received Bengaluru NCLT approval for itsSerum transaction in Jan’23 although Mumbai bench is yet to approve (matter listed on 6Mar’23). Once approved, JM Financial believes 4Q will see a big step-up in revenues driven by Serum revenues, first full quarter of Viatris consolidation and Semglee market share gains. In Jul’23,the eagerly awaited bHumira ‘Hulio’ will be launched which will drive incremental earnings growth.

Post the Syngene stake sale, the company will hold higher stake in Biocon Biologics at 65-66% (vs. 62-63%) thereby lowering the impact of lower Syngene stake on SOTP.

Promoter/FII Holdings
Promoters held 60.64 per cent stake in the company as of 31-Dec-2022, while FIIs owned 14.42 per cent, DIIs 8.63 per cent.