Biocon Limited — Q2 FY26 earnings call

Call held 12 Nov 2025

Management summary

Biocon delivered a strong Q2 FY26, with group operating revenue growing 20% year-on-year to ₹4,296 crores, primarily driven by robust biosimilars and generics segments. Core EBITDA rose 23% to ₹1,218 crores with a 28% margin, while profit before tax surged 153%. The company also made significant progress in debt reduction and biosimilar portfolio expansion, including U.S. FDA approval for bDenosumab and successful launches of five biosimilar products, despite modest growth in the CRDMO segment.

Highlights

  • Group operating revenue of ₹4,296 crores, up 20% YoY, driven by strong biosimilars and generics performance.

  • Core EBITDA increased 23% YoY to ₹1,218 crores, achieving a 28% margin, reflecting improved operating leverage.

  • Balance sheet strengthened by settling structured debt obligations with Goldman Sachs and Kotak, with further savings expected.

  • Achieved U.S. FDA approval for bDenosumab and successfully launched five biosimilar products across geographies.

  • Generics business showed robust growth of 24% YoY, supported by new product launches like GLP-1 Liraglutide and Sacubitril/Valsartan.

Concerns

  • CRDMO business (Syngene) reported a modest 2% YoY growth to ₹911 crores.

  • Generics gross margins were in the mid-40s in H1 FY26, impacted by new facilities and pricing pressure on some products like Statins.

  • Biosimilar R&D investment remained high at 7% of revenues, reflecting continued pipeline investments.

Key financials

  1. Operating Revenue ₹4,296 Cr +20%YoY
  2. Core EBITDA ₹1,218 Cr +23%YoY
  3. Core EBITDA Margin 28%
  4. EBITDA ₹928 Cr +29%YoY
  5. EBITDA Margin 21%
  6. R&D Investment (ex-Syngene) ₹251 Cr
  7. R&D Investment (% of Revenue) 7%
  8. Profit Before Tax (ex-exceptionals) ₹183 Cr +153%YoY
  9. Net Profit ₹85 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

Share of Revenue
₹4,406 Cr Total
  • Biosimilars ₹2,721 Cr 61.8%
  • CRDMO (Syngene) ₹911 Cr 20.7%
  • Generics ₹774 Cr 17.6%

Capital allocation

high confidence
  • Debt Net $1.1 Bn Maturity: Short-term maturities are revolving credit.
    • Repayment Settled structured debt obligations with Goldman Sachs and Kotak from QIP proceeds.
    • Repayment Goldman Sachs exit happened on June 30, Kotak exit happened on October 1.
    • Repayment Agreement with Edelweiss to exit on or before January 31.
    • Repayment CP issue for about INR 6 billion has been repaid.
    most of the net debt payable to bondholders and the banks is in the Biosimilars subsidiary. That is about USD 1.1 billion as of September.

Guidance & targets

Interest Costs

  • Annual Savings Interest Costs · from FY27 · High confidence INR 300 crores
    The full benefit, however, of this debt reduction will be visible from FY '27 with annual savings of around INR300 crores in interest costs.

    — Kiran Mazumdar Shaw

R&D Spend

  • Biosimilars R&D Spend (% of Revenue) R&D Spend · Full year basis · High confidence 7% to 9%
    We've said, Tushar, that we would be in that 7% to 9% of revenues for R&D, and we continue to be in that range even now and on a full year basis, you will see us in that 7% to 9% range.

    — Shreehas Tambe

  • Generics R&D Spend (% of Revenue) R&D Spend · Ongoing · High confidence 8% to 10%
    So, the R&D spend again, last quarter was at 9% of Generics revenue. And I expect it to be in a similar trajectory of 8% to 10% of revenues.

    — Siddharth Mittal

Gross Margins

  • Generics Gross Margins Gross Margins · H1 FY26 · High confidence Mid-40s
    And as far as the gross margins are concerned, we are looking at mid-40s. Of course, this fluctuates depending on what kind of product launches come up and what kind of pricing we get. We are, of course, expecting improvement in gross margin in the coming quarters. But at least in H1, we have seen mid-40s margin.

    — Siddharth Mittal

Product Launch

  • bDenosumab Launch Product Launch · Near term · High confidence Imminent
    we expect an imminent launch of bDenosumab.

    — Kiran Mazumdar Shaw

Generics Performance

  • Performance Generics Performance · Second half of the fiscal · Medium confidence Strengthen further
    For the Generics business, we expect performance in the second half of the fiscal to strengthen further on the back of new product launches and continued focus on expanding the reach of key products across global markets.

Syngene Guidance

  • Annual Guidance Syngene Guidance · FY26 · High confidence Maintaining
    The performance in the first half has been in line with expectations, and Syngene is maintaining its annual guidance for FY '26.

What to watch in Q3 FY26

Interest Cost Reduction (Kotak & Edelweiss impact)

Q3 FY26, Q4 FY26
Current Goldman Sachs impact already reflecting in Q2 FY26 margins.
Target Kotak impact visible in Q3 FY26, Edelweiss impact visible in Q4 FY26.

Why it matters

Directly impacts the company's profitability and reflects the benefits of recent debt reduction efforts.

I think Q3 will reflect the Kotak and then Q4 should reflect the Edelweiss.

Risks & concerns

  • Generics gross margin pressure

    medium

    Gross margins in the mid-40s in H1 FY26, impacted by new facilities and pricing pressure on products like Statins.

    Management acknowledged

  • Value erosion from aggressive market share chase in biosimilars

    medium

    Market shares and ASPs are inversely proportional; chasing market share aggressively without considering value can lead to quick value erosion.

    Management acknowledged

  • High competition in Denosumab market

    medium

    5 players currently in the market and 5 more in the pipeline, necessitating a measured commercialization approach.

    Management acknowledged

Q&A highlights

7 direct
Insulin Aspart commercial traction and ramp-up Direct
We are the first interchangeable bAspart that the FDA has approved. It is indeed a very proud moment for us. We are seeing a very strong traction for our insulin products, not just in the U.S. but globally. We will and we have already launched Aspart in a very responsible manner, first with an integrated player in the U.S., where we can responsibly supply that. We will continue to see a full year '26 demand that comes in. As you know that we will be working with these commercial payers through '25. And then as we get into '26, you will see the traction grow.

Clarifies the launch strategy and expected ramp-up timeline for a key new biosimilar product, highlighting its unique interchangeable status.

Asked by Tushar Manudhane

Impact of revised FDA guidance on comparative efficacy trials for biosimilars Direct
If you refer to the previous conversations we've had on this topic, we clearly have said this is a very progressive move by the FDA. We appreciate these progressive steps that the agency has taken. We also see this as an opportunity for established players like Biocon, who've got an excellent track record of bringing products to market.

Addresses a significant regulatory change that could reduce development costs and accelerate time-to-market for biosimilars, potentially benefiting established players.

Asked by Harith Ahamed

Competitive intensity in biosimilars post new FDA guidance Direct
I think as Shreehas mentioned, Harith, whilst people will obviously try to invest in biosimilars much more exuberantly than they have done in the past because of cost of development, established players like Biocon Biologics will have a clear advantage of bringing more products to the market. So, we expect our pipeline development to be more expanded and extended and faster to the market. So, we don't necessarily see this as a competitive threat, but we see this as a great opportunity of expanding our portfolio.

Provides management's perspective on how the competitive landscape might evolve with easier biosimilar approvals, asserting Biocon's advantage.

Asked by Harith Ahamed

Drivers for Generics business performance and margin improvement Direct
And, of course, the facilities getting capitalized is one thing. We also must lock in customers, especially for our APIs from these facilities, which would take some time, but the main uptick in the margin is because of the GLP-1 Liraglutide launch in the European market. And we, of course, have other products as well, which contributed to the revenue growth and the profit growth. Dasatinib was launched in quarter 4 of last fiscal FY '25. So, it continues to do well for us. We had an important launch in quarter 2, which was Sacubitril/Valsartan as well, which led to the growth in quarter 2 and the margin.

Clarifies the specific product launches (GLP-1 Liraglutide, Sacubitril/Valsartan) and market factors driving the improved performance and margins in the Generics segment.

Asked by Harith Ahamed

Timeline for interest cost reduction impact on P&L Direct
Yes. I think I mentioned in my comments, if you heard, that we've already started reflecting the Goldman Sachs impact on our margins. And I think Q3 will reflect the Kotak and then Q4 should reflect the Edelweiss.

Provides a clear quarter-by-quarter timeline for when the financial benefits of recent debt repayments will be visible in the P&L.

Asked by Harith Ahamed

Biocon's participation in biosimilar Keytruda development Partial
I think it's very timely that the conversation that we've been having with the agency has resulted in the agency coming back and saying that the CES trial is no longer a mandatory requirement. In fact, it's not required for products to be approved. There are a couple of companies or more who've committed to this trial, and they have publicly stated that they are stepping back from those trials as well. Have we moved along that path, we would have probably incurred cost and exposed patients to that. So, I think we've been forward-looking on this. We've taken the lead, as always, on the scientific conversations that we've had with the agency on saying that we have enough CMC data, enough characterization analytical data to demonstrate that our product should be approved without clinical study Phase III.

Addresses a major future opportunity (Keytruda) and Biocon's strategy, leveraging new regulatory guidance to potentially avoid costly Phase III trials, indicating a scientific rather than partnership-driven approach.

Asked by Sidharth Negandhi

Market share for Yesintek and Aspart, and comparison to Semglee Direct
The first piece is that as a community, there was a concern that whether Stelara would move in the similar direction as an Humira and it's encouraging to see that, that's not happened. You are seeing far more formularies listing biosimilars. Particularly, we've had tremendous success with Yesintek with over 70% of the commercial formularies listing the product. And that is very encouraging. So, it behaves very differently than what we had seen in the past, a couple of years ago. So that is one encouraging sign.

Provides qualitative insights into the market acceptance and formulary listings for key biosimilar products, indicating better traction than previous launches.

Asked by Surya Patra

Commercialization of Denosumab and Bevacizumab, competitive scenarios Direct
There are two brands that Denosumab is commercialized. One, like you rightly said, is in the pharmacy benefit space. And there's another brand which is in the medical benefit space. Both compete for a different share of the market, and there are different archetypes in how those are commercialized. One of them will follow the route that we just talked about where pricing will play a big role. And the other, which is in the medical benefit place, will follow a route similar to our oncology franchise, where pricing alone is not important. You will have to gain traction with the IDNs or the buyers so that you can value maximize it. They are linked commercially from a source of what WAC prices you come up with and how do you chase market share. There are 5 players in the market today and five more in the pipeline. So, there are going to be people chasing this. If we pursue just market share, there is going to be a risk of losing value very quickly. We understand this market very well, Surya.

Details the nuanced commercialization strategy for Denosumab, acknowledging the competitive landscape and emphasizing value maximization over pure market share chase.

Asked by Surya Patra

3 min read 6 chapters

Detailed narrative

Strong Q2 FY26 Performance Driven by Biosimilars and Generics

Biocon Group reported a robust Q2 FY26 with operating revenue reaching INR 4,296 crores, marking a 20% year-on-year growth. This performance was primarily fueled by strong contributions from the biosimilars segment, which grew 25% year-on-year to INR 2,721 crores, and the generics segment, which saw a 24% year-on-year increase to INR 774 crores. Core EBITDA for the group stood at INR 1,218 crores, up 23% year-on-year, with a healthy margin of 28%, while overall EBITDA grew 29% year-on-year to INR 928 crores, achieving a 21% margin.

Balance Sheet Strengthening and Interest Cost Savings

The company significantly strengthened its balance sheet by settling structured debt obligations with Goldman Sachs and Kotak, utilizing QIP proceeds. An agreement with Edelweiss for debt exit is also in progress, expected by January 31. Management projects annual savings of approximately INR 300 crores in interest costs from FY '27, with the impact of Goldman Sachs' exit already reflected, Kotak's in Q3 FY26, and Edelweiss's in Q4 FY26. A previously issued CP of INR 6 billion has also been repaid.

Biosimilars Portfolio Expansion and Market Traction

Biocon achieved a key milestone with U.S. FDA approval of bDenosumab and successfully launched five biosimilar products, including bUstekinumab (Yesintek), bAspart, bBevacizumab, and bAflibercept, across various geographies. Yesintek gained strong commercial traction in the U.S., securing broad coverage. The company also launched the first and only interchangeable biosimilar Aspart in the U.S., anticipating strong traction to grow in calendar year 2026 after commercial payer engagements in 2025. The biosimilars segment reported INR 2,721 crores in revenue, up 25% YoY, with EBITDA growing over 40% to INR 669 crores and a 25% margin.

Generics Business Growth and Margin Improvement

The generics business delivered strong revenue performance, growing 24% year-on-year to INR 774 crores, with an 11% sequential increase. This growth was supported by recent product launches in both the U.S. and EU, as well as the base business across generic formulations and APIs. A key driver was the launch of GLP-1 Liraglutide in the European market and Sacubitril/Valsartan in Q2 FY26. While gross margins were in the mid-40s in H1 FY26, management expects improvement in coming quarters, with R&D investments projected to be 8-10% of segment revenues.

CRDMO (Syngene) Performance and Strategic Expansion

Syngene's performance was in line with expectations, reporting INR 911 crores in revenue, a 2% year-on-year increase, and an EBITDA of INR 215 crores with a 23% margin. Strategically, Syngene secured its first global Phase III clinical trial from a U.S.-based biotech company and expanded its clinical trials footprint to new regions like Australia, New Zealand, and the U.K. The company is also expanding its biologic facility in Bengaluru by adding a GMP bioconjugation suite to enhance end-to-end manufacturing capabilities for Antibody Drug Conjugates (ADCs).

Impact of Revised FDA Guidance on Biosimilar Development

Management views the revised FDA guidance on lowering requirements for comparative efficacy trials as a significant positive. This change is expected to reduce development costs and shorten time-to-market for biosimilar products, benefiting patients. While it may encourage more players, Biocon believes its established track record and focus on CMC and GMP clearance give it a clear advantage in bringing products to market faster, seeing it as an opportunity to expand its portfolio rather than a competitive threat. This also influences their strategy for upcoming patent cliffs like Keytruda, where they believe their scientific data may suffice without Phase III clinical trials.

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