Biocon surges on reports of foreign brokerage upgrade

Biocon rose 7.59% to Rs 528.25 at 14:03 IST on BSE after a foreign brokerage reportedly upgraded its rating to overweight from underweight, saying 2016 could be a turning point for the biopharmaceutical company.

Meanwhile, the S&P BSE Sensex was down 471.54 points or 1.86% at 24,924.40

On BSE, so far 4.31 lakh shares were traded in the counter as against average daily volume of 67,408 shares in the past one quarter. The stock hit a high of Rs 532.70 and a low of Rs 499.55 so far during the day. The stock had hit a 52-week high of Rs 544 on 5 January 2016. The stock had hit a 52-week low of Rs 396.50 on 25 August 2015. The stock had underperformed the market over the past one month till 4 April 2016, rising 0.89% compared with Sensex's 3.06% rise. The scrip had also underperformed the market in past one quarter, falling 8.02% as against Sensex's 0.87% fall.

The mid-cap company has equity capital of Rs 100 crore. Face value per share is Rs 5.

The foreign brokerage reportedly sees Biocon as a strong re-rating story given that markets have hardly priced in its biosimilar pipeline. It believes that company and its partner Mylan's four potential product filings each in the US and EU would add credibility to its pipeline and bring market recognition, reports added. Four lead compounds of Biocon are glargine, trastuzumab, pegfilgrastim and adalimumab.Emerging market monetisation is under way, but the US and EU opportunities will take at least two years, according to report. By 2020, the brokerage reportedly expects Biocon's revenue at $244 million growing at 30% margins, implying doubling of current profits. The company has a follow-on pipeline of another five products in early stages which together give growth visibility over longer term, reports indicated.

On consolidated basis, Biocon's net profit rose 13.3% to Rs 103 crore on 8.8% growth in net sales to Rs 828.20 crore in Q3 December 2015 over Q3 December 2014.

Biocon is India's largest and fully-integrated, innovation-led biopharmaceutical company.

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