Biocon Q1 Results: Net profit declines on both quarterly and annual basis

Written by: Shoaib Zaman

Biocon Q1 Results: Net profit declines
Biocon: Quotes, News
BSE 1005.85BSE Quote25.6 (2.55%)
NSE 1008.15NSE Quote27.8 (2.76%)
Biocon's result was disappointing. But there could be a hidden opportunity in it. 

Quarter-on-Quarter review

The company's revenue was Rs 379.62 crore for the March quarter 2011 and it fell to Rs 348.03 crore for the June quarter (Q1FY12). The resultant decrease was of 8.32% q-o-q.

Other income increased by 9.32% in Q1FY12 to Rs 8.33 crore. The company also managed to decrease its expenses in the same period by 1.02% to Rs 261.36 crore. Interest expense also decreased during the period from Rs 0.71 crore to Rs 0.59 crore.

Meanwhile net profit took a hit by 31% as it fell from Rs 88.03 crore in Q4FY2011 to Rs 60.4 crore in Q1FY2012.

Year-on-Year review

Biocon's revenue increased by 4.74% from Rs 332.27 crore in June quarter of 2010 (Q1FY2011) to Rs 348.03 in June quarter of 2011. This was an increase of 4.74% year-on-year (y-o-y).

For the same period other income increased to Rs 8.33 crore which is an increase of 37.46%. But expense went up too high by 11.57% to Rs 261.36 crore.

Meanwhile net profit also fell by 16.46% for the company on y-o-y basis, which is significant for this fast growing company.

(All figures are from the BSE wesbite) 


In its press release the company said that its experimental oral insulin drug, IN-105, is in final stage trials. The company also said that it was in talks with several potential partners for the global development and commercialization of the drug.

It is also pursuing talks for licensing Itolizumab, used in the treatment of psoriasis and rheumatoid arthritis.

Kiran Mazumdar-Shaw, Biocon's chairwoman, said in the statement, "There has been lower licensing income recognition this quarter. This is as per plan and is expected to ramp up in the quarters ahead".

The company stated that its divestment of its stake in the German marketing firm Axicorp has been completed. It had earlier said the sale was part of its focus on global alliances that would include Germany and did not require the company to have a separate unit for the region.

View: The drop in net profit was significant to send the investors looking for a medicine. Its shareholding pattern shows interesting trend. The FIIs have reduced their position again in this quarter, albeit it was a small 0.26 percentage points (example, (15%-14%) reflects change of 1 percentage points). During the March 2011 quarter the FIIs reduced their holding by -1.24 percentages points. 

So do they know something that we don't know or was it just a case of booking the gains? we will not come to know right now bu t over the next few quarters the story shall definitely develop and should be tracked.

If you have the stock and are risk averse then sell or hold on to see how it develops. Would not recommend to buy without further research of the stock.

OneIndia Money

Read more about: pharma, biocon, bse, nse
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