Biocon

Biocon reported a resilient Q4 FY26, with group operating revenue growing 10% year-on-year (adjusted for one-time^📎 items). Adjusted EBITDA reached ₹1,073 crores, marking a 29% year-on-year increase with a 23% margin. The company completed a significant strategic transition, integrating its biosimilars and generics businesses, and is now focused on execution, operating leverage, and value creation. This transition was achieved seamlessly within 100 days, reflecting strong execution capabilities.

The Biosimilars segment demonstrated strong performance, with Q4 FY26 revenue at ₹2,756 crores, a 12% year-on-year increase, and EBITDA growing 33% to ₹720 crores, achieving a 26% margin. For the full FY26, biosimilars revenue grew 16% and EBITDA 40% on a like-to-like basis. Key approvals included Health Canada for denosumab biosimilars (Bosaya™ and Vevzuo™) and U.S. commercial launches of Bosaya™ and Aukelso™. The company also expanded its immunology and ophthalmology presence in Europe with Yesintek® and Yesafili®.

The Generics business, adjusted for one-time^📎 lenalidomide supplies, grew 13% year-on-year in Q4 FY26 to ₹847 crores, primarily driven by liraglutide sales in Europe. EBITDA for the segment was ₹75 crores, with an 8% margin, improving nearly 300 basis points over Q3. For FY26, adjusted generics revenue grew 17% and EBITDA 73%. The company secured U.S. FDA approvals for liraglutide (diabetes and weight management indications) and everolimus tablets, alongside tacrolimus approval in Latin American markets.

The CRDMO business reported revenues of ₹1,037 crores in Q4 FY26, a 2% year-on-year increase and 13% quarter-on-quarter. Full-year FY26 revenue stood at ₹3,739 crores, up 3% year-on-year, with an operating EBITDA margin of 25%. The segment's performance was notably impacted by a single large molecule biologics client, though the underlying business showed steady momentum. Syngene completed 14 client and regulatory audits during the quarter, bringing the full year total to 85.

Biocon made significant progress in strengthening its balance sheet and deleveraging. Net debt has been reduced to $1.1 billion from over $1.5 billion in March 2025. This has resulted in interest cost savings of ₹70-75 crores per quarter, with the full annualized benefit expected to be visible from FY27. The company's bonds are trading at a premium, and rating agencies have upgraded its ratings, reflecting improved financial health.

The major investment phase is largely complete, with the company having invested materially in biosimilars, insulins, peptides, and complex generics. Management indicated no need for large greenfield capex going forward^⏳. Capacity expansion in Malaysia, including the doubling of drug substance and drug product lines, is progressing, with the drug product line already operational and drug substance doubling expected by the end of FY27. The focus is now on improving utilization, expanding margins, and driving return on capital employed.

Management highlighted the positive impact of new FDA draft guidelines that reduce R&D costs by 50% and accelerate product development by 3-4 years for biosimilars, albeit requiring higher comparability standards. Biocon believes its proven track record in CMC comparability and analytical characterization gives it an advantage. The company's strategy in the US market focuses on profitable growth rather than aggressive market share capture, particularly for medical benefit products where market share and ASP are inversely proportional.

Biocon's insulin franchise has crossed $300 million in FY26, including Glargine, Aspart, and human insulin. The global insulin market is estimated at $7-8 billion, with recombinant human insulin alone being $1.5 billion. Management views the insulin space as a tremendous opportunity, especially given Biocon's unique position as the only company with a biosimilar insulin and peptide portfolio, and its long-term integrated capabilities.