Biocon’s Q1 Net At Rs 94 Crore

India's largest bio-pharma company Biocon has reported 21% growth in its revenues to Rs 694 crore. The net profit also rose by 21% to Rs 94 crore. The company has said that it has seen a positive impact of the rupee depreciation on its revenues. Biocon's growth rate at 21% is much better than the 8% growth rate recorded by the domestic pharma markets.

During the quarter, the company has reported 20% growth in the pharma business and 22% growth in the CRAMS business. The PBIT margins of the Pharma business have shown an improvement while that of the CRAMS business have shown a decline of 250 basis points. Overall, the EBITDA margins of the company have shown an improvement of 39 basis points. Sequentially too, the margins have shown a remarkable improvement. Expansion in the EBITDA margins is mainly due to cost cutting, better product mix and restructuring in the organisation.

The quarter has also seen 21% growth in the company’s R&D expenses. As a percentage of sales, the R&D expenses stood at 10% of the Bio-pharma sales.

The company, during the quarter, has seen a rise in the tax rate. It has remained at 24% against 15% in the corresponding quarter of the last fiscal. The company has guided the tax rate for the year to be 24% due to the expiration of tax benefits for its facilities in the Special Economic Zone.

The Q1 results are fantastic and the company, due to restructuring, is looking in a good shape. Moreover, the chaos related to the insulin contract has become a thing of the past because of the contract with Mylan. The company is looking to launch its second novel biologic Alzumab in this quarter and hence there could be some gains in the stock going ahead. Investors looking for 8-10% returns may take exposure to this stock.