Biocon Limited Q4FY23 Earnings

Biocon Result

Let me start with a high-level summary for FY23. Biocon has delivered a total revenue of ₹11,550 crores, a growth of 38% over FY22. All business segments contributed to the growth with operating revenues in Biosimilars growing 61% to ₹5,584 crores, Research Services by 23% to ₹3,193 crores and Generics by 13% to ₹2,637 crores.

The year gone by saw the completion of the landmark acquisition of Viatris’ biosimilars business which has contributed to the year’s growth. In fact, Q4 reflects the full contribution of the Viatris acquisition. This strategic investment, we believe, will accelerate our journey to global leadership as a fully integrated biosimilars player.

Syngene delivered a strong performance led by its manufacturing services business, which includes the signing of a 10-year biologics manufacturing agreement with Zoetis, expected to be worth around US$500 million over the contract period.

The Generics business continued its geographic expansion initiatives with strategic partnerships across markets. FY23 marked the launch of products in a few ex-US geographies such as the UK and other emerging markets. And this coupled with a strong performance in the base business contributed to the segment delivering 13% year-on-year growth. Investments in R&D and Capex towards a pipeline of complex products including peptides and oncology molecules are expected to play out positively in the coming years

Sustainability is integral to Biocon’s business purpose. The company continues to develop a progressive agenda for its ESG practices in alignment with stakeholder expectations as well as of course the company’s objectives. Our efforts continue to receive global recognition reflected by our improving scores from leading global sustainability indexes. Biocon improved its score in the Dow Jones Sustainability Index over 2021 from 45 to 52 and based on this performance, we were inducted into the S&P DJSI’s prestigious annual sustainability yearbook under the industry mover category. Biocon was also awarded a Silver Medal by EcoVadis for its sustainability accomplishments.

It has certainly been a transformative year for the Biocon Group. All three business segments are at an inflection point and poised for significant growth in the years ahead.

Let me start with the Q4 numbers.

At the group level, total revenues for the quarter was up 59% year-on-year to ₹3,929 crores. The Biosimilars segment revenue more than doubled on the back of the acquisition of Viatris’ biosimilars business, with Q4 reflecting the first full quarter of consolidation. Research services grew 31% while generics remained flat. The total revenue also included ₹109 crores of the stake dilution gain in Bicara, pursuant to their Series B fundraise. Core EBITDA grew by 56% to ₹1,260 crores, representing continued healthy core operating margins of 35%. R&D spend stood at ₹342 crores, which is an increase of ₹152 crores for the same period last fiscal, and it corresponds to 12% of revenues ex-Syngene. EBITDA for the quarter was up 75% to ₹1,152 crores versus ₹659 crores in the same period last year. EBITDA margins stood at 29% as compared to 27% for the same period last year. Depreciation, amortization, and interest increased by ₹389 crores over last year and this is primarily related to the biosimilars business acquisition cost. Consequently, profit before tax and exceptional items stood at ₹500 crores up 30% year-on-year.

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