Biocon slides as Q3 PAT falls 7% on R&D cost, tax impact

Biocon fell 2.28% to Rs 287.50 after the company announced Q3 results after market hours yesterday, 23 January 2020.

On a consolidated basis, net profit fell 6.6% to Rs 202.80 crore in Q3 December 2019 (Q3 FY20) from Rs 217.20 crore in Q3 December 2018 (Q3 FY19), due to higher R&D expenses and tax impact of an exceptional item. Profit before tax (PBT) stood at Rs 315.10 in Q3 FY20, up by 8.9% from Rs 289.30 crore in Q3 FY19.

Net profit margin fell to 11% in Q3 FY20 from 13% in Q3 FY19. Net sales rose 13.5% to Rs 1748.10 crore in Q3 FY20 as compared to Rs 1540.80 crore recorded in Q3 FY19.

Net R&D expenses surged 71% to Rs 131 crore year-on-year (YoY). Tax expenses jumped 83.94% to Rs 84.8 crore during the period under review.

Consolidated EBITDA stood at Rs 480 crore in Q3 December 2019, up by 18% from Rs 406 crore in Q3 December 2018. EBITDA margin rose to 27% in Q3 FY20 from 26% in Q3 FY19.

Offering details on segmental revenues, Biocon said that branded formulations' revenues fell 26% to Rs 157 crore in Q3 FY20 over Q3 FY19. Revenues from the biologics segment rose the most to Rs 588 crore, up 31% YoY. The small molecules business revenues rose 16% to Rs 544 crore and those of the research services segment recorded a growth of 11%, rising to Rs 519 crore in Q3 December 2019 over Q3 December 2018.

Commenting on the highlights, chairperson & managing director, Kiran Mazumdar-Shaw stated: "We witnessed a strong revenue growth led by Biologics, Small Molecules and Research Services businesses. We continued our journey of increasing access to high quality biosimilars and commercialized our biosimilar Trastuzumab in U.S., Canada and many EU markets this quarter."

"Importantly, we have initiated value unlocking of our biosimilars business with the dilution of a minority stake to True North for a primary equity investment of approximately $75 million, which gives a pre-money equity valuation of approximately $3 billion for Biocon Biologics. We plan to raise further capital at an opportune time in the near future", she added.

Biocon is an innovation-led global biopharmaceuticals company.

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