Biocon Limited — Q1 FY26 earnings call

Call held 8 Aug 2025

Management summary

Biocon delivered a strong Q1 FY26, with operating revenue growing 15% to INR 3,942 crores, primarily driven by robust performance in Biosimilars (up 18%) and CRDMO (up 11%). The company achieved key regulatory approvals, including the first interchangeable biosimilar Insulin Aspart in the US, and strengthened its balance sheet with a INR 4,500 crore QIP. While Generics faced margin pressure from new facility ramp-up costs, management anticipates improved profitability from H2 FY26 with new product launches and increased capacity utilization.

Highlights

  • Operating revenue stood at INR 3,942 crores, up 15% year-on-year, demonstrating strong overall growth.

  • Biosimilars revenue grew 18% year-on-year to INR 2,458 crores, with EBITDA increasing 36% year-on-year to INR 645 crores, reflecting robust performance.

  • Core EBITDA reached INR 1,003 crores, an 11% year-on-year increase, maintaining a healthy margin of 25%.

  • Profit before tax, excluding exceptionals, significantly rose 72% to INR 97 crores on a like-for-like basis.

  • Successfully completed a Qualified Institutions Placement (QIP) of INR 4,500 crores, strengthening the balance sheet and facilitating debt reduction.

  • Received U.S. FDA approval for Kirsty™ (biosimilar Insulin Aspart), making it the first and only interchangeable rapid-acting insulin in the U.S., reinforcing market leadership.

Concerns

  • Generics EBITDA was impacted by ramp-up costs of approximately INR 60 crores per quarter for new facilities, which are expected to continue.

  • Higher interest and depreciation costs from recent Capex also impacted PBT performance.

  • Lenalidomide sales are not expected to continue for the first 3 quarters of this fiscal (FY26) due to limited quantity, impacting generics revenue.

  • Adalimumab (Hulio) US market is experiencing softening pricing, leading to competitive pressures.

Key financials

  1. Operating Revenue ₹3,942 Cr +15%YoY
  2. Core EBITDA ₹1,003 Cr +11%YoY
  3. Core EBITDA Margin 25%
  4. Reported EBITDA ₹829 Cr +19%YoY
  5. Profit Before Tax (excl. exceptionals) ₹97 Cr +72%YoY
  6. R&D Investments ₹205 Cr

What they filed

Q1 FY27: revenue up 10.0%, net profit up 53.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue3,590 3,821 4,417 3,942 4,296 +20%4,173 +9%4,517 +2%4,336 +10%
EBITDA685 752 1,078 766 835 +22%834 +11%1,020 −5%847 +11%
Net profit27 81 459 89 133 +393%-52 −164%199 −57%137 +54%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentRevenueEBITDA
Biosimilars₹2,458 Cr₹645 Cr
CRDMO (Syngene)₹875 Cr₹224 Cr
Generics——

Capital allocation

high confidence
  • Capex Capex disclosed
    • Operationalizing new facilities (peptide API plant, Vizag fermentation, Cranbury NJ facility)
    • Injectables facility (GLP-1s) commissioning and qualification
    • Doubling Malaysia facility (drug product line) capacity
    • Syngene's Bayview biologics facility commissioning
    EBITDA reflects ramp-up costs linked to operationalizing new facilities, including Our peptide API plant Our expanded fermentation capacity in Vizag; and Our Cranbury, New Jersey facility in the U.S. And while these costs impact margins in the near term, these new capacities are expected to deliver strong ROCE as utilization ramps up, especially in GLP-1s. Our injectables facility primarily focused on GLP-1s has been commissioned with commercial supply expected to begin in FY '27. This facility strengthens our position in the fast-evolving Metabolic and Diabetes care space and is part of our broader commitment to building advanced manufacturing capacity aligned with future portfolio needs. Biologics manufacturing has made good progress in terms of capacity expansion. Unit III, which is our biologics facility in Bengaluru, is now operational. The Bayview facility in the U.S. remains on track for commissioning later this year. The Malaysia facility, as you know, we have doubled the expansion of the drug product line, and that is going to be operational very imminently. However, it obviously will only cater to certain markets till all the regulatory inspections are through.
  • Debt Net $1.15 Bn Maturity: Bonds due for repayment in '29
    • Repayment Repayment to Goldman Sachs OCD (5% coupon on USD 180 million) from QIP proceeds, completed by end of June. $200 Mn
    • Repayment Commercial paper due in September. Repayments to Kotak and Edelweiss later this fiscal.
    Biocon Biologics has a net debt of USD 1.15 billion, USD 100 million debt in generics, USD 100 million cash in Syngene. So when you add these 3, it's USD 1.15 billion, which is primarily the debt in Biocon Biologics. Parent, as I mentioned, Biocon has USD 100 million of debt. But the bank interest will continue for a foreseeable future because these are primarily on the bonds, which are 5 years bond, which will be due for repayment in '29.
  • Liquidity Cash $120 Mn Syngene is cash positive by USD 120 million.
    approximately USD100 million at the Generics level and USD 120 million cash positive in Research.

Guidance & targets

Revenue Growth

  • Generics Revenue Growth Revenue Growth · full year · Medium confidence strong double-digit growth
    on a full year basis, again, I do expect generics to get back to the profitable and growth trajectory on the margins front. And I think Kiran already alluded in her concluding remarks that with all these upcoming launches, generics will have a strong double-digit growth on a revenue front.

    — Siddharth Mittal

Commercial Supply

  • GLP-1 Injectables Facility Commercial Supply Commercial Supply · FY27 · High confidence begin in FY '27
    Our injectables facility primarily focused on GLP-1s has been commissioned with commercial supply expected to begin in FY '27.

    — Kiran Mazumdar Shaw

Regulatory Approval

  • Liraglutide US Approval Regulatory Approval · FY26 · Medium confidence sometime this fiscal
    We definitely do expect the approval to come in sometime this fiscal.

    — Siddharth Mittal

  • Semaglutide Approval (Emerging Markets/Canada) Regulatory Approval · CY26/CY27 · Medium confidence by end of calendar '26, but more likely '27
    expecting early approvals in some of the markets where we'll file this quarter by end of calendar '26/early calendar '27.

    — Siddharth Mittal

  • Denosumab US Approval Regulatory Approval · CY25 · High confidence before the end of this calendar year
    approval before the end of this calendar year. And we are tracking well to that date in the U.S. So we see that approval imminent.

    — Shreehas Tambe

Product Launch

  • Liraglutide US Launch Product Launch · FY26 · Medium confidence during this fiscal
    I cannot comment on the timing exactly, but we do expect a launch in the U.S. during this fiscal.

    — Siddharth Mittal

  • Aspart Launch Product Launch · CY25 · Medium confidence between now and the end of the year
    On the Aspart piece, we'll be launching immediately. We have approval. We'll start seeing more pull-through. As you remember, the U.S. is set on a July basis and a January basis. So aspart will be strategically launching between now and the end of the year and leveraging our relationships and our great franchise that we set up with Semglee.

    — Matthew Erick

  • Bevacizumab Launch Product Launch · Q2/Q3 FY26 · High confidence towards the end of the summer around the October time frame
    And in regard to Bevacizumab, you'll see this launching towards the end of the summer around the October time frame and which will continue to start leveraging our oncology portfolio and ramping up our payor strategies as we go into the first of the year.

    — Matthew Erick

Regulatory Filing

  • Semaglutide Filing (Emerging Markets/Canada) Regulatory Filing · Q2 FY26 · High confidence in quarter 2
    We are going to file in quarter 2, which is this quarter in many emerging markets in Canada.

    — Siddharth Mittal

Operating Costs

  • Generics New Facility Operating Costs Operating Costs · ongoing · High confidence INR 60 crores a quarter (INR 240 crores for full year)
    The impact is roughly INR 60 crores a quarter. So, when you look at the EBITDA or the margins or gross margins from the sales that Generics business has recorded, it is in line with the quarter 1 of last year EBITDA, but that has been impacted by these facility payroll and other operating costs for these 3 facilities, and which will continue for now going forward. See, the cost which is there in quarter 1 P&L relating to the three new facilities, roughly INR 60 crores. So on a full year basis, it's roughly INR 240 crores.

    — Siddharth Mittal

Ownership Stake

  • Biocon Biologics Stake Ownership Stake · fully diluted basis · High confidence up to 78%
    on a fully diluted basis, assuming all these I mean, Goldman and Kotak/ Edelweiss is paid out, we'll be up to 78% stake in Biocon Biologics.

    — Siddharth Mittal

Market Position

  • Biosimilars Leadership Market Position · next 5 years · Medium confidence surge into a leadership position
    we're in the top 5 biosimilars companies in the world, and I think we are very well positioned to really surge into a leadership position in the next 5 years. That is what our aim is.

    — Kiran Mazumdar Shaw

Capacity Expansion

  • Malaysia Insulin Facility Operational Status Capacity Expansion · near term · High confidence operational very imminently
    the Malaysia facility, as you know, we have doubled the expansion of the drug product line, and that is going to be operational very imminently.

    — Kiran Mazumdar Shaw

What to watch in Q2 FY26

Reduction in interest burden from Goldman Sachs OCD

Q2 FY26 onwards
Current USD 180 million OCD with 5% coupon
Target Reduction in interest costs

Why it matters

Direct impact on profitability following QIP proceeds utilization and debt repayment.

Q2 will definitely go down for Goldman Sachs, which had the 5% coupon on USD 180 million.

Risks & concerns

  • Generics profitability impact from new facility operating costs

    medium

    Ongoing operating costs of approximately INR 60 crores per quarter for new facilities are impacting generics EBITDA.

    Management acknowledged

  • Temporary absence of Lenalidomide sales

    medium

    No significant sales of Lenalidomide are expected for the first 3 quarters of FY26 due to limited quantity.

    Management acknowledged

  • Softening pricing in Adalimumab US market

    medium

    The market price for Adalimumab in the US is settling, with pricing starting to soften.

    Analyst acknowledged

  • Regulatory delays for GLP-1 approvals in Canada

    medium

    Health Canada has not yet approved any generic GLP-1, indicating a slower review process for this class of drugs.

    Management acknowledged

  • Investor perception of debt burden from Viatris acquisition

    low

    Management believes the QIP and bond issue have made the company financially robust, addressing concerns about the debt burden.

    Analyst downplayed

Q&A highlights

6 direct
Biosimilars gross margin vs. EBITDA margin trends Partial
Biologics gross margins have held steady and Opex, as a percentage of revenue has started seeing an improving trend.

Clarified that while EBITDA margin expanded due to operating leverage, gross margins remained steady, providing insight into profitability drivers.

Asked by Damayanti Kerai

Consolidated Net Debt and impact of QIP on interest expense Direct
Biocon Biologics has a net debt of USD 1.15 billion, USD 100 million debt in generics, USD 100 million cash in Syngene. So when you add these 3, it's USD 1.15 billion, which is primarily the debt in Biocon Biologics. Q2 will definitely go down for Goldman Sachs, which had the 5% coupon on USD 180 million.

Provided a clear breakdown of the group's net debt and explained the immediate impact of QIP proceeds on reducing interest burden from Q2 FY26.

Asked by Damayanti Kerai

Generics business performance, Revlimid sales, and new facility operating costs Direct
Till the product is launched in an unlimited quantity, which is going to happen at the beginning of next calendar year, we are not going to have any more continuing sales of Lenalidomide for at least the first 3 quarters of this fiscal. The impact of all these facilities operating costs is in the P&L, which is going to be on an ongoing basis. The impact is roughly INR 60 crores a quarter.

Explained the temporary absence of significant Revlimid sales and quantified the ongoing operating costs from new facilities impacting generics profitability.

Asked by Surya Patra

Compulsion for Biocon Biologics IPO Direct
No, there's no compulsion. I think we have said that IPO is I mean the commitment to Viatris that we had was the best effort, and we have time to give exit to investors, which is in few years. So there's no compulsion as such.

Clarified that there is no immediate pressure for an IPO, providing flexibility for the company's strategic planning.

Asked by Surya Patra

Ustekinumab (Yesintek) US launch success and Insulin Aspart strategy Direct
Yesintek... very successful launch... strong formulary coverage... large share of the prescriptions have moved towards Yesintek. Insulin Aspart... first and the only interchangeable rapid-acting insulin analogue in the U.S. market at this point.

Highlighted strong early traction for Yesintek and the strategic advantage of Kirsty™ as the first interchangeable rapid-acting insulin in the US, indicating future growth potential.

Asked by Surya Patra

Long-term outlook for biosimilars and the Viatris acquisition Direct
acquisition has been a very important acquisition for us. I think, without the Viatris acquisition, we could never be a global biopharmaceutical company. We are now in a very healthy financial state. I think the fact that we have done the QIP and the bond issue has made us far more financially robust.

Reaffirmed the strategic importance of the Viatris acquisition despite initial debt concerns, emphasizing the strengthened balance sheet and future growth potential.

Asked by Vipulkumar Shah

Sustainable margins for biosimilars with operating leverage Partial
directionally, I think improvement is what will kick in, but we don't specifically guide for any range, Nitin. But you are right, directionally, I think you should see improvement in gross margins, because of new launches and the Opex as a percentage of revenue.

Indicated management's confidence in future margin expansion for biosimilars due to new launches and operating leverage, even without providing specific numerical targets.

Asked by Nitin Agarwal

Liraglutide U.S. FDA queries and status Direct
We have addressed all the queries. We had two open points with the FDA in the last CRL. One was related to the facility clearance, which... has been subsequently cleared, received VAI. And there was some specific data that the FDA asked, which we had responded to, and we have a target action date being assigned by FDA.

Provided an update on the regulatory status of Liraglutide in the US, indicating progress on addressing FDA queries and an assigned target action date.

Asked by Tushar Manudhane

3 min read 6 chapters

Detailed narrative

Strong Q1 FY26 Performance Driven by Biosimilars and CRDMO

Biocon commenced FY26 with robust performance, reporting an operating revenue of INR 3,942 crores, a 15% year-on-year increase. Core EBITDA grew 11% YoY to INR 1,003 crores, maintaining a 25% margin. Profit before tax, excluding exceptionals, saw a significant 72% YoY rise to INR 97 crores, indicating improved operational leverage. The Biosimilars segment was a primary growth engine, with revenue up 18% YoY to INR 2,458 crores and EBITDA increasing 36% YoY to INR 645 crores. The CRDMO business (Syngene) also contributed strongly, achieving INR 875 crores in revenue, an 11% YoY increase, and an EBITDA of INR 224 crores, up 19% YoY.

Key Regulatory Approvals and Product Launches

The company achieved several significant regulatory milestones, including the U.S. FDA approval for Kirsty™ (biosimilar Insulin Aspart), making it the first and only interchangeable rapid-acting insulin in the U.S. This approval reinforces Biocon's leadership in the US Insulins market. Additionally, Biocon launched Yesafili™ (biosimilar Aflibercept) in Canada and secured approvals for biosimilar Denosumab from both the European Commission and U.K. MHRA, marking its entry into the bone health therapy area. The oncology portfolio, including Ogivri® and Fulphila®, maintained a strong 27% market share in North America.

Balance Sheet Strengthening and Debt Management

Biocon successfully completed a Qualified Institutions Placement (QIP) of INR 4,500 crores, significantly strengthening its financial position. Approximately USD 200 million from the QIP proceeds were utilized to repay Goldman Sachs OCD by the end of June, with further repayments to Kotak and Edelweiss planned later this fiscal. This strategic debt reduction is expected to lead to a decrease in interest burden from Q2 FY26 onwards. Post these repayments, Biocon's stake in Biocon Biologics is projected to increase to 78% on a fully diluted basis.

Generics Segment Faces Short-Term Profitability Headwinds

The Generics segment reported INR 697 crores in revenue, a 6% year-on-year increase, with product sales growing 13% YoY. However, profitability was impacted by ongoing operating costs of approximately INR 60 crores per quarter, totaling an estimated INR 240 crores for the full year, associated with new facilities (Immunosuppressants, Peptides, Cranbury NJ) capitalized last fiscal. Management indicated that significant Lenalidomide sales, which boosted Q4 FY25, would not continue for the first three quarters of FY26. Despite these headwinds, management expects margins to ramp up from H2 FY26 due to new product launches and increased capacity utilization.

Strategic Investments in Capacity and Pipeline

Biocon continues to invest in expanding its manufacturing capabilities and product pipeline. The injectables facility focused on GLP-1s has been commissioned, with commercial supply anticipated to begin in FY27. The Malaysia facility for drug product line expansion has doubled its capacity and is expected to be operational 'very imminently,' supporting growing global insulin demand. Syngene's Bayview biologics facility in the U.S. is also on track for commissioning later this year, enhancing CRDMO capabilities and providing direct access to the US biologics market.

Outlook on Future Launches and Market Opportunities

The company anticipates strong double-digit growth for its Generics business for the full year, driven by multiple product launches in the coming quarters, including Liraglutide in Europe and the US (pending FDA approval). Biocon plans to file Semaglutide in emerging markets and Canada in Q2 FY26, with approvals expected by late calendar '26 or '27. Management expressed confidence in the biosimilars business, aiming to surge into a leadership position in the next five years, leveraging its broad portfolio in oncology, diabetes, and autoimmune diseases.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Healthcare earnings calls