Biocon Q2 FY27 Results (NSE: BIOCON)
Signal: Margin pressure
The read
The quarter marks a deterioration from Q1FY27's 20% margin and 10% revenue growth: Q2 revenue growth decelerated to 2% and EBITDA margin contracted to 20% from 22% YoY, but the Biopharma engine remained positive with 5% growth and the portfolio now has stronger H2 catalysts from Pertuzumab, Aflibercept, Ustekinumab and Malaysia insulin capacity.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹4,389 Cr | 2% | 1% |
| EBIT | ₹302 Cr | -15% | |
| Net profit | ₹41 Cr | -52% | |
| EPS | ₹0.3 | -67% | |
| EBIT margin | 20% |
P&L walk
Revenue grew 2% YoY to ₹4,389 crore, led by 5% Biopharma growth but offset by a 9% Services decline; EBITDA fell 7% to ₹865 crore and margin contracted to 20% from 22%, while PAT fell 52% to ₹41 crore after higher depreciation, exceptional charges and minority interest.
Segments
Biopharma drove the group with revenue up 5% YoY to ₹3,583 crore, led by Generics at +10% and Biosimilars at +3%, while Services dragged consolidated growth with a 9% YoY revenue decline to ₹833 crore despite 13% sequential growth.
Key positives
- Biopharma revenue increased 5% YoY to ₹3,583 crore, with Generics revenue up 10% to ₹774 crore.
- Services revenue recovered 13% sequentially to ₹833 crore, while Syngene operating EBITDA margin improved 6 percentage points sequentially to 18%.
- The company secured a roughly USD 400 million, 10-year Pertuzumab PDP partnership in Brazil and over USD 100 million of new contracts and major payor wins in the U.S.
- Pertuzumab received a positive EMA CHMP opinion and the company secured earliest licensed launch dates across Europe, the UK, U.S. and emerging markets; Yesafili and Yesintek also showed early U.S. momentum.
- Interest cost declined 12% YoY to ₹240 crore, supporting balance-sheet improvement despite higher sequential finance charges.
Key concerns
- EBITDA declined 7% YoY to ₹865 crore and EBITDA margin contracted 200bps to 20%, despite 2% revenue growth.
- Services revenue declined 9% YoY to ₹833 crore; Syngene's own revenue declined 9% YoY and its 18% operating EBITDA margin remained below the mid-20s level referenced in prior expectations.
- Depreciation and amortisation increased 19% YoY to ₹563 crore, causing EBIT to decline 15% to ₹302 crore.
- Reported PAT fell 52% YoY to ₹41 crore, with minority interest increasing to ₹18 crore from ₹1 crore and materially reducing attributable earnings.
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