Biocon Limited — Q4 FY26 earnings call

Call held 8 May 2026

Management summary

Biocon closed FY26 with a resilient operating performance, driven by strong growth in Biosimilars and Generics segments, despite a volatile macro environment. The company made significant progress on deleveraging, reducing net debt and realizing interest cost savings. Key product approvals and launches, particularly for denosumab and liraglutide, position the company for continued growth, with a focus on execution and margin expansion in FY27.

Highlights

  • Group delivered biosimilars-led 10% year-on-year growth in operating revenue (excluding one-time bonus of generic lenalidomide in Q4 FY25).

  • Group EBITDA was at ₹1,073 crores with a margin of 23%, adjusted for generic lenalidomide, this was up 29% year-on-year.

  • Biosimilars revenue for Q4 FY '26 stood at ₹2,756 crores, representing a 12% year-on-year increase, driven primarily by advanced markets.

  • Generics revenue, adjusted for one-time generic lenalidomide supplies in Q4 of FY '25, grew 13% year-on-year, driven by generic liraglutide sales in Europe.

  • Net debt reduced to $1.1 billion from over $1.5 billion, and interest cost savings of ₹70-75 crores per quarter are now being reflected in the P&L.

Concerns

  • The external environment remained challenging throughout the quarter with geopolitical uncertainty continuing to impact supply chains, logistics and energy costs.

  • CRDMO business grew only 2% year-on-year in Q4 FY '26 and 3% for FY '26, with overall numbers reflecting the specific impact from a single large molecule biologics client.

Key financials

2 periods

Headline

  • Group Operating Revenue (Adjusted)
    —
    YoY +10%
  • Group EBITDA (Adjusted)
    ₹1,073 Cr
    YoY +29%
  • Group EBITDA Margin (Adjusted)
    23%
  • Reported Net Profit (before exceptionals)
    ₹179 Cr

FY26

  • Operating Revenue (Adjusted)
    —
    YoY +13%
  • EBITDA (Adjusted)
    —
    YoY +25%
  • EBITDA Margin (Adjusted)
    22%
  • Reported Net Profit (before exceptionals)
    ₹436 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

SegmentRevenue Q4 FY26EBITDA Q4 FY26EBITDA Margin Q4 FY26
Biosimilars₹2,756 Cr₹720 Cr26%
Generics—₹75 Cr8%
CRDMO₹1,037 Cr——

Capital allocation

high confidence
  • Capex Capex disclosed
    From a capital and investment perspective, the heavy lifting is largely done and behind us. Over the past few years, we have invested materially to build global scale capabilities and capacity, particularly in biosimilars, insulins, peptides and complex generics. As we stand today, this major investment phase is substantially complete.
  • Debt Net $1.1 Bn
    • Repayment Net debt reduced from over $1.5 billion to $1.1 billion.
    • Rate reset Interest cost savings of ₹70-75 crores per quarter are being reflected in the P&L.
    If you remember in March '25, including structured instruments, we had, in fact, more than $1.5 billion of net debt. That's down to $1.1 billion now. So, it will hover between $1.1 billion to $1.2 billion subject to working capital. And free cash that we generate hereafter will go towards reduction of net debt, Neha. That's right. We also Kiran refer to interest cost reduction. If you remember, first quarter of FY'26, we had booked INR280 crores in that quarter. It was trending upwards to INR300 crores. And from those levels, now we are down to about INR210 crores, INR220 crores. It will have some currency impact because a large part of our debt is in dollar. But in that sense, about INR70 crores, INR75 crores per quarter of interest cost reduction is being reflected in the P&L.

Guidance & targets

Growth

  • Biosimilars revenue growth Growth · Q4 FY26 · High confidence 12%
    In Q4 FY '26, the group delivered a biosimilars-led 10% year-on-year growth in operating revenue, excluding the onetime bonus of generic lenalidomide in Q4 FY '25.

    — Kiran Mazumdar Shaw

  • Group EBITDA growth (adjusted) Growth · Q4 FY26 · High confidence 29%
    EBITDA was at INR1,073 crores with a margin of 23%. Adjusted for generic lenalidomide in the base, this was up 29% year-on-year.

    — Kiran Mazumdar Shaw

Product Launch

  • Aspart ramp-up Product Launch · second half of the current fiscal year (FY27) · High confidence ramp-up
    Last quarter, we also said that Aspart will start seeing a ramp-up which will come in towards the second half of the current fiscal year, and you'll see that happen.

    — Shreehas Tambe

  • Aflibercept launch in US Product Launch · second half of this year (FY27) · High confidence launch
    We've publicly stated we have a negotiated settlement date with the originator for our aflibercept launch in the United States. And you will see that play out in the coming fiscal year.

    — Shreehas Tambe

Capacity

  • Malaysia DS capacity doubling Capacity · towards the end of this financial year (FY27) · High confidence doubling
    DS, the drug substance doubling will happen towards the end of this financial year.

    — Kedar Upadhye

Biosimilars

  • Biosimilars revenue contribution split (long term) Biosimilars · long term · Medium confidence North America ~40%, Europe ~35%, Emerging Markets ~25%
    If I give you a split, it's been roughly North America at 40%, 35% in Europe and 25% emerging markets. You see sometimes a little bit of a shift between North America and Europe.

    — Shreehas Tambe

  • Insulin franchise revenue Biosimilars · FY26 · High confidence $300 million plus
    Insulin now has crossed $300 million this year. So that's the bracket that it has crossed and that includes Glargine, Aspart, human insulin, DS and DP. So total insulin franchise is now beyond $300 million.

    — Kedar Upadhye

  • Adalimumab revenue Biosimilars · FY26 · High confidence $250 million plus
    Adalimumab is now beyond $250 million and Pegfilgrastim, Trastuzumab are hovering around $200 million or slightly lower than that.

    — Kedar Upadhye

  • Bevacizumab revenue Biosimilars · FY26 · High confidence $100 million plus
    Bevacizumab has crossed $100 million now. This is without contribution from U.S. because the launch has just been made.

    — Kedar Upadhye

What to watch in Q1 FY27

Aspart ramp-up

H2 FY27
Current Starting to show numbers in P&L
Target Meaningful ramp-up

Why it matters

Aspart is a key product for FY27, and its ramp-up will be a significant driver of biosimilars revenue growth.

Last quarter, we also said that Aspart will start seeing a ramp-up which will come in towards the second half of the current fiscal year, and you'll see that happen.

Risks & concerns

  • Volatile macro environment impacting supply chains, logistics, and energy costs

    medium

    Geopolitical uncertainty continues to impact supply chains, logistics, and energy costs, posing challenges to operations.

    Management acknowledged

  • Impact on CRDMO business from a single large molecule biologics client

    medium

    The CRDMO segment's growth was specifically impacted by a single large molecule biologics client, affecting overall numbers.

    Management acknowledged

  • Potential market disruption from Chinese companies in the insulin space

    low

    Analyst raised concerns about Chinese companies disrupting insulin markets, but management asserted Biocon's integrated capabilities and long-term commitment provide a competitive advantage.

    Analyst downplayed

Q&A highlights

6 direct, 1 evasive
Reclassification of P&L items (INR760 crores, INR210 crores) Evasive
Yes, Sanjay, if you're referring to what is captured in the other comprehensive income, there are some adjustments that you do there, which don't appear in the normal P&L. I'll take it offline. Why don't we take it offline Sanjay?

Management chose to take a question about significant P&L reclassifications offline, suggesting complexity or sensitivity not suitable for public discussion, which could be a red flag for transparency.

Asked by Sanjay Kohli

Biosimilars revenue improvement in Q4 vs Q2 and stabilization of Q3 disruption Direct
And I think if you look at the numbers between Q3 and Q4, you have seen a sequential change, where we moved from a quarter which was $279 million, $280 million to about $300-plus million this quarter. So, there's a sequential growth of 12% that you are seeing on a rupee basis in the revenues.

Analyst questioned the lack of material improvement in biosimilars revenue despite market share increases and prior disruptions, prompting management to clarify sequential growth and future ramp-up expectations.

Asked by Neha Manpuria

Impact of new FDA draft guidelines reducing R&D cost for biosimilars Direct
One is it has reduced the development cost by 50%. It's half the development cost. And it's accelerated products from a development standpoint by at least 3 to 4 years, which is again cutting down time for products, which can get into market.

This question explored a significant regulatory change that could accelerate biosimilar development and reduce costs, highlighting Biocon's potential advantage given its track record in comparability.

Asked by Avnish Burman

Constant currency sales split by division, market shares, and products above $200 million Direct
Insulin now has crossed $300 million this year. So that's the bracket that it has crossed and that includes Glargine, Aspart, human insulin, DS and DP. So total insulin franchise is now beyond $300 million.

Analyst sought granular financial and market share data, leading to specific disclosures on key product revenue milestones and segment-wise growth in constant currency terms.

Asked by Sidharth Negandhi

Biosimilars capacity utilization and future capex needs Direct
So as the Malaysia capacity doubles both for drug substance and drug product, I think we are fine there. Plus, we have some external CMOs as well, as you know. And in Bangalore, I think there could be minor debottlenecking here and there. But as of now, we don't see any need for a large greenfield capex, Tushar.

This question clarified the company's capacity readiness for future growth and confirmed that no major greenfield capex is anticipated, signaling a shift towards asset utilization.

Asked by Tushar Manudhane

Generics scale-up, margin improvement, and gross margin breakdown Direct
I think, Tushar, the gross margins are in early 40s, and that's two-third API, one-third generics, that's kind of a split today.

Analyst probed into the generics segment's profitability and growth drivers, leading to a disclosure of gross margin composition and the strategy for future margin expansion through operating leverage.

Asked by Tushar Manudhane

US dollar bonds hedging policy and thoughts on callable bonds Direct
Yes. Imtiaaz on the bonds, we don't have to hedge because we have a natural hedge. We are largely a dollarized company. So, we have significant dollar cash flows. So, we don't hedge our loan book actually.

This question addressed the company's financial risk management strategy regarding its dollar-denominated debt and its approach to potential bond calls, providing insight into capital structure management.

Asked by Imtiaaz Shefuddin

US business momentum and likely share of US business in FY27 vs FY26 Partial
So, our focus is always profitable growth and not necessarily market shares. So, we'll be very careful in doing that. So, I wouldn't necessarily look at market shares as the only proxy for success.

Analyst sought clarity on the US market's contribution to future growth, prompting management to emphasize a strategy of profitable growth over aggressive market share capture, particularly for new launches like denosumab.

Asked by Surya Patra

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Detailed narrative

Q4 FY26 Performance Overview and Strategic Transition

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.

Biosimilars Business Growth and Key Launches

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®.

Generics Segment Performance and Product Approvals

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.

CRDMO Business Update

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.

Deleveraging and Financial Flexibility

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.

Capital Allocation and Future Capex Plans

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.

Biosimilar Market Dynamics and Regulatory Environment

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.

Insulin Franchise and Market Opportunity

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.

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