Biocon chief sees generics business firing up next year
Biocon's generics business includes the active pharmaceutical ingredient (API) and the formulations businesses. While the formulations business continues to deliver high double-digit growth, the API business has been under pressure.
Bengaluru-headquartered Biocon expects generics business sales growth to improve to high-teens in the financial year 2025.
Siddharth Mittal, the company's Managing Director and CEO said the generics business has huge potential. The company plans to introduce some new differentiated molecules as well as peptides by the end of calendar year 2024 or early 2025, which will drive growth.
Biocon's generics business includes the active pharmaceutical ingredient (API) and the formulations businesses. While the formulations business continues to deliver high double-digit growth, the API business has been weak.
"The API business has been under pressure due to pricing pressure faced by our customers and some stocking that few customers had done anticipating tenders which they were not able to secure. So they are trying to liquidate that inventory now," Mittal told CNBC-TV18.
The company commissioned a peptides API manufacturing unit in Bengaluru and a greenfield fermentation-based immunosuppressant API facility in Visakhapatnam in FY23.
The generics business is roughly 20% of Biocon's total sales. The segment's revenue grew around 4% year-on-year (YoY) in the second quarter of financial year 2024 to around ₹676 crore.
Over FY18-23, the generics business has seen 12% compounded annual growth rate (CAGR), per a note released by brokerage firm Motilal Oswal on November 3.
The challenges in the generics API business and the phasing of the phasing of supplies due to planned shutdown has weighed down Biocon's shares with net losses year-to-date at around 3%. This is after factoring in over 8% gains in the last month.
Motilal Oswal has a 'neutral' rating on the stock as the brokerage sees limited upside in price from the current levels.
The company's market capitalisation is around ₹30,500 crore.
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(Edited by : Shweta Mungre)
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