Book Partial Profit - Biocon

Biocon formed a part of our recommendations in our Issue 6 dated March 14, 2010. The scrip was recommended in our column Choice Scrip at a price of Rs 262 with a one year price target of Rs 343. Biocon is mainly present in four seg-ments namely diabetology, cardiology, nephrology and oncology. The Biocon Group, which includes its German subsidiary AxiCorp, has posted a YoY income growth of 44 per cent with revenues of Rs 2,405 crore. Its EBITDA is Rs 509 crore with a 31 per cent YoY growth and its PAT at Rs 293 crore indicates a 215 per cent YoY growth.

Its EBITDA margins are at 21 per cent. Excluding AxiCorp, the group’s total income was Rs 1,493 crore, which is a 25 per cent growth YoY. Its EBITDA is Rs 455 crore, a growth of 22 per cent, and its PAT at Rs 270 crore is a 211 per cent Y-o-Y growth. On a segmented basis, insulins and immunosuppressant businesses together have grown by 20 per cent. In insulins the company has witnessed a growth of 11 per cent Y-o-Y and has been able to enter into several new markets and has also secured registration approvals in five countries during the year. It is in the process of registering in 21 other countries over the next few years.

Immunosuppressants have registered a strong 28 per cent growth and both these segments are going to be very important in terms of contributing to further growth this coming fiscal.

Statins have posted a very strong 26 per cent YoY growth and have begun to make inroads into emerging markets. The company has also declared a dividend of Rs 3.50 for the last fiscal. The scrip at present trades at Rs 324.85 and is already up by 24 per cent. Our suggestion is that readers should book partial profits and stay invested in the rest for a longer term for more gains.