Biotechnology major Biocon on Wednesday posted a profit before tax (PBT) of Rs 354 crore for the second quarter ended September 30, 2019, a decline of 22 per cent when compared with the corresponding period of previous fiscal. This is primarily because in the Q2 of FY19, the company had reported an exceptional income of Rs 189 crore as compared to just Rs 68 crore it saw in the just ended quarter. Excluding the exceptional item, the PBT grew 9 per cent on year-on-year basis.
The net profit for the period declined 39 per cent to Rs 216 crore on YoY basis though excluding the exceptional item, it saw a growth of 3 per cent. The exceptional income reported in Q2 of FY19 was primarily due to the fair value of the company's investment in US-based Equillium.
The moderate growth in net profit (excluding exceptional item) was attributed to higher expenses arising out of investments in R&D for portfolio expansion and talent acquisition to enable independent management of few of its business units under the company’s new organizational structure.
“We have increased investments in R&D for portfolio expansion as well as for high quality talent acquisition to enable independent management of Biocon Biologics, Small Molecules and Novels businesses under the new organizational structure. These costs have led to net profit (adjusted for exceptional item) of Rs 189 crore, marginally higher than last year and positions us for a strong future,” said Kiran Mazumdar-Shaw, Chairperson & Managing Director, Biocon.
In the September quarter, the Bengaluru-headquartered company’s revenue stood at Rs 1,611 crore, a growth of 17 per cent on a year-on-year basis. The consolidated operating margin stood at 27 per cent in Q2FY20.
“We expect growth momentum to build further in the second half of FY20, driven by biosimilars launches in the US and generic formulations business, and expected additional capacities coming online later this fiscal,” added Shaw.
The Biologics segment reported a strong revenue growth of 40 per cent at Rs 516 crore for the quarter, led by a robust performance by key biosimilars portfolio in developed and emerging markets. Biosimilars business crossed the Rs 1,000 crore revenue milestone in the first half of the current financial year.
“Biocon Biologics aspires to be a global leader in high quality biosimilars with a revenue target of $1 billion by FY22. Together with a team of over 4,000 people, we have embarked on a journey of transforming healthcare and transforming lives,” said Christiane Hamacher, CEO, Biocon Biologics.
While the small molecules business reported a revenue growth of 23 per cent for the quarter at Rs 530 crore, revenue from the branded formulations segment saw a decline of 22 per cent.
The company also announced the retirement of Arun Chandavarkar, Chief Executive Officer and Joint Managing Director of Biocon, in November end. He will be replaced by current chief financial officer Siddharth Mittal, who will take office from December 1 this year.