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Report By: Surbhi Lohia – surbhi@dynamiclevels.com
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Biocon- Making Survival Cheaper
Page 2
Company Overview and Stock Price
3
Product Overview
4
Syngene: Exclusively Inclusive
6
Pharma Sector Outlook
7
Govt Initiatives in Pharma
8
Company Financials
9
Peer Comparison
13
Shareholding Pattern
14
Biocon enters Japan
16
Investment Rationale
17
Source: Company, www.dynamiclevels.com
Company’s Overview and Stock Price
Biocon is India’s largest biotech company run by Kiran Mazumder
Shaw. It has presence in more than 100 countries. Biocon has been
driven by its strategy to provide affordable access to advanced
biopharmaceuticals for global patient populations. It aspires to become
a US $ 1 billion company by FY 18.
As a fully integrated biopharma company it delivers innovative
biopharmaceutical solutions, ranging from discovery to development
and commercialization, leveraging the cutting edge science, costeffective drug development capabilities and global scale manufacturing
capacities, to move ideas to market.
F16 Results highlights are as follows:
 Revenues grew 16.9% YoY to 978.8 crore mainly due to 32.8%
growth in the research segment Syngene.
 Biopharma segment grew 8.6% YoY to 531 crore due to
biosimilar launches in emerging markets,
 EBITDA margins declined 31 bps YoY to 21.8% mainly due to
higher R&D expenses. EBITDA grew 15.3% YoY to 213.3 crore.
BIOCON Share Price Performance
EXCHANGE SYMBOL
BIOCON
Current Price * (Rs.)
610.35
Face Value (Rs.)
5
52 Week High (Rs.)
628.5(4-5-16)
52 Week Low (Rs.)
395.3(24-8-15)
Life Time high (Rs.)
628.5(4-5-16)
Life Time low (Rs.)
85 (2-12-08)
Average Daily Movement 14.28
Average Volume
1178973
1 Month Return (%)
16.18
P/E Ratio (x)
13.67
Book Value
208.29
Market Cap
12252.00 (Cr)
% of Promoter holding
Pledged
0.04
COMPANY PROFILE OF BIOCON
Chart Hypothesis: Above is the weekly price chart of Biocon for last 1
yr, in which we can see that it made a new high of628.5 and has given
breakout of important level of 545.
Page 3
Date of Incorporation
29-Nov-1978
Date of Listing
07-Apr-2004
Management
Name
Designation
M Damodaran
Addnl.Independent
Director
Jeremy Levin
Addnl.Independent
Director
Vijay Kuchroo
Addnl.Independent
Director
Kiran Mazumdar
Chairperson & MD
Shaw
Arun Chandavarkar
Joint MD & CEO
Daniel M Bradbury
Non Exe. Director
Russel Walls
Non Exe. Director
Suresh N Talwar
Non Exe. Director
Bala S Manian
Non Exe. Director
Mary Harney
Non Exe. Director
Charles L Cooney
Non Exe. Director
Ravi Mazumdar
Non Exe. Director
John Shaw
Vice Chairman
Registered Office Address
20th K M, Hosur Road,Electronic
City,560100,Bengaluru,Karnataka,India
Website
http:// www.biocon.com
Source: Company, www.dynamiclevels.com
Product Overview
Biocon has systematically leveraged its technology platforms from
enzymes to small molecules to recombinant proteins and antibodies.
Through partnerships and alliances, Biocon has strategically moved up
the value chain from supplying pharmaceutical bulk actives to
developing proprietary molecules and own branded formulations.
In the areas of custom and clinical research services, collaborative
partnerships with complementary biotechnology and pharmaceutical
companies are yielding rich results. These partnerships will positively
impact all phases of discovery portfolio. Biocon offers range of
products from fermentation derived small molecules to recombinant
proteins and antibodies. In the specialized field of custom biomanufacturing, Biocon provides high quality, cost-competitive services
to domestic and international pharmaceutical companies.
Small Molecules: Biocon's Small Molecules business is built on a robust
foundation of unique expertise in fermentation technology and
entrenched presence in the chronic therapy space. Biocon’s
differentiated portfolio spans complex molecules ranging from
cardiovascular and anti-obesity agents to immuno-suppressants and
narrow spectrum antibiotics. It provides affordable access to patients
and partners across the globe.
APIs: Biocon is one of the largest statins and immunosuppressant’s
manufacturers in the world and a preferred partner for Active
Pharmaceutical Ingredients (APIs).
With a strong focus on R&D in the Small Molecules business, Biocon
has built a robust pipeline of complex generic products. A steady
stream of new Drug Master Files (DMF) is filed with various regulatory
authorities in several countries.
Generic Formulations: Biocon is developing value-added generic
formulations for both emerging and developed markets.
The Generic Formulations business, established in 2012, filed its first
set of Abbreviated New Drug Applications (ANDAs) in the US and
Marketing Authorization Applications (MAAs) in the EU during FY 15.
These filings are in line with their strategy of reducing the threat arising
from the commoditization of APIs, by moving up the value chain to
develop generic finished dosages for global markets.
Page 4
Source: Company, www.dynamiclevels.com
Forward integration of complex fermentation-based APIs, expertise in
producing large-scale sterile injectables and manufacturing capabilities
for device-based products are Biocon’s key differentiators in the
competitive generic formulations business. To strengthen this business
further, Biocon is also setting up a greenfield oral solid dosage facility.
Biosimilars: Biocon has leveraged its core strength of fermentation
technology to develop a wide portfolio of generic Insulins and Analogs,
biosimilar Monoclonal Antibodies (MAbs) and recombinant proteins.
Biocon has emerged as a significant global player by competence and
pioneering technology capabilities.
As the Biosimilars opportunity unfolds, Biocon is at the right place, at
the right time. Biocon is rapidly growing its development, regulatory
and clinical expertise, along with world class manufacturing
capabilities, to make therapies affordable to patients, on a global scale.
Biocon is well positioned to contribute towards lowering costs and
increasing access to this highly innovative class of drugs.
The Biosimilars opportunity is set to expand as patents expire on
leading biologics and patients demand lower priced drugs. A number of
top-selling biologics are due to lose product patent protection over the
next 5-7 years, opening up a wealth of new possibilities for biosimilars
players. Key therapy areas such as cancer, diabetes and rheumatoid
arthritis will spearhead this new wave of biosimilars. Biocon is well
placed to leverage many of these opportunities. Biocon is entering
emerging markets with Recombinant Human Insulin (rh-Insulin), Insulin
Analogs and Monoclonal Antibodies (MAbs), key products in
Biosimilars portfolio.
Branded Formulations: Branded Formulations has been a strong
growth driver and a considerable value builder for Brand Biocon. The
Company is committed to achieving market leadership in its chosen
therapeutic areas through a carefully orchestrated strategy of product
differentiation and personalized medical support.
Biocon's presence in the chronic disease segment in India, is
represented by over 80 brands spread across six therapeutic segments:
Metabolics, Oncotherapeutics, Nephrology, Comprehensive Care,
Immunotherapeutics and Virology.
Page 5
Source: Company, www.dynamiclevels.com
Syngene: Exclusively inclusive:
Syngene has championed the ‘Exclusively inclusive’ philosophy of
Biocon by offering niche services to a large and diverse clientele. It has
also established exclusively dedicated R&D centers for some of its
anchor clients like Bristol. Incorporated in 1993 as a subsidiary of
Biocon Limited, Syngene is a leading custom research and
manufacturing organization, which supports R&D programs from lead
generation to clinical supplies.
At Syngene Clinical development group, partners with global
pharmaceutical and biotechnology companies in their clinical
development programs. It evaluates the safety and efficacy of new
drugs across a wide range of therapeutic indications.
Syngene team ensure:
- Timely execution of projects
- Cost effectiveness and quality of the projects
- Confidentiality and protection of intellectual property
Syngene International IPO
oversubscribed 31 times.
Mr. Jonathan Hunt, Chief Executive Officer - Syngene International
Limited said, “We are happy to report excellent revenue growth of 31%
during Q4 FY16, with revenues growing from Rs 254 Cr in Q4 FY15 to Rs
334 Cr in Q4 FY16. This growth has been driven by robust
performances within all three of our key business verticals; dedicated
R&D centers, discovery services as well as development &
manufacturing services. On a full year basis, I am happy to report
strong revenue growth of 28%; this momentum, combined with our
extensive capital investment plans, puts us “on-track” to achieve our
mid-term revenue target for FY 18 and deliver excellent returns for our
investors”
Page 6
Source: Company, www.dynamiclevels.com
Pharmaceutical Sector Outlook
The Indian pharmaceuticals market is the 3rd largest in terms of volume
and 13th largest in terms of value. Branded generics dominate the
pharmaceuticals market, constituting nearly 70 to 80 % of the market.
India is the largest provider of generic drugs globally with the Indian
generics accounting for 20 % of global exports in terms of volume. The
Indian pharmacy industry, which is expected to grow over 15 % p.a.
between 2015 and 2020, will outperform the global pharmacy industry,
which is set to grow 5 % p.a. between the same periods. Presently the
market size of the pharmaceutical industry in India stands at US$ 20
billion. India has the largest number US FDA compliant plants. The
industry is expected to reach US$ 55 million by 2020, out of which
US$ 30 million will be for exports.
Increasing investments in the sector
• The Indian pharmaceuticals market increased at a CAGR of 17.46
per cent in 2015 from US$ 6 billion in 2005 and is expected to expand
at a CAGR of 15.92 per cent to US$ 55 billion by 2020.
• By 2020, India is likely to be among the top three pharmaceutical
markets by incremental growth and sixth largest market globally in
absolute size.
• India’s cost of production is significantly lower than that of the US
and almost half of that of Europe. It gives a competitive edge to India
over others.
Generic drugs form the largest segment
• With 70 per cent of market share (in terms of revenues), generic
drugs form the largest segment of the Indian pharmaceutical sector.
• India supplies 20 % of global generic medicines market exports in
terms of volume, making India the largest provider of generic
medicines globally and expected to expand even further in coming
years
• Over the Counter (OTC) medicines and patented drugs constitute 21
% and 9 %, respectively, of total market revenues of US$ 20 billion.
Page 7
Source: Company, www.dynamiclevels.com
Government Initiatives in Pharma
The Government of India’s 'Pharma Vision 2020' aims at making India
a global leader in end-to-end drug manufacture. Approval time for new
facilities has been reduced to boost investments. Further, the
government introduced mechanisms such as the Drug Price Control
Order and the National Pharmaceutical Pricing Authority to deal with
the issue of affordability and availability of medicines.
Some of the major initiatives taken by the government to promote
the pharmaceutical sector in India are as follows:
 Indian Pharmaceutical Association, the professional association
of pharmaceutical companies in India, plans to prepare data
integrity guidelines which will help to measure and benchmark
the quality of Indian companies with global peers.
 The GOI plans to give incentive to bulk drug manufacturers,
including both state-run and private companies, to encourage
‘Make in India’ programme and reduce dependence on imports
of active pharmaceutical ingredients (API), nearly 85 % of
which come from China.
 The Department of Pharma has set up an inter-ministerial coordination committee, which would periodically review,
coordinate and facilitate the resolution of the issues and
constraints faced by the Indian pharmaceutical companies.
 The Department of Pharma has planned to launch a venture
capital fund of Rs 1,000 crore to support start-ups in the R&D
in the pharmaceutical and biotech industry.
 Indian and global companies have expressed 175 investment
intentions worth Rs 1,000 crore in the pharmaceutical sector of
Gujarat.
 Telangana has proposed to set up India's largest integrated
pharmaceutical city spread over 11,000 acres near Hyderabad,
complete with effluent treatment plants and a township for
employees, in a bid to attract investment of Rs 30,000 crore in
phases. Hyderabad, which is known as the bulk drug capital of
India, accounts for nearly a fifth of India's exports of drugs,
which stood at Rs 95,000 crore in 2014-15.
Page 8
'Pharma Vision 2020' aims
at making India a global
leader in end-to-end drug
manufacture.
GOI plans to give
incentive to bulk drug
manufacturers
Encourage ‘Make in India’
programme and reduce
dependence on imports of
API
Source: Company, www.dynamiclevels.com
Company Financials
Income Statement (in Cr)
Net Sales
Other Operating Income
Total Income From Operations
Increase/Decrease in Stocks
Consumption of Raw Materials
Purchase of Traded Goods
Employees Cost
Depreciation
Other Expenses
Total Expenditure
Operating Profit
Other Income
PBIT
Interest
P/L Before XO Items & Tax
Exceptional Item
P/L Before Tax
Tax
PAT
Minority Interest
Net Profit/(Loss) For the Period
Equity Share Capital
Reserves
EPS (Rs.)
Mar16
Quarterly
970.3
8.5
978.8
23.9
307.8
29.5
173.5
62.8
231
828.5
150.3
24.7
175
1.4
173.6
268.4
442
58.2
383.8
-22.9
360.9
100
-18.05
Dec15
Quarterly
828.2
8.2
836.4
-28.5
310.3
30.9
158.9
62.1
175.7
709.4
127
19.7
146.7
1.5
145.2
-145.2
24.1
121.1
-18.1
103
100
-5.15
Sep15
Quarterly
Jun15
Quarterly
828.48
8.72
837.2
-41.2
346.66
24.16
149.68
59.61
160.24
699.15
138.05
24.6
162.65
2.93
159.72
307
466.72
137.69
329.03
-23.06
305.97
100
-15.3
778.96
54.03
832.99
13.99
290.12
22.42
154.27
57.8
140.01
678.61
154.38
23.52
177.9
4.42
173.48
-173.48
36.95
136.53
-10.29
126.24
100
-6.31
Mar15
Quarterly
830.38
7.3
837.68
9.88
292.29
35.34
136.56
58.52
178.38
710.97
126.71
16.83
143.54
-143.54
95.16
238.7
21.9
216.8
-15.26
201.54
100
-10.08
Mar16
Annual
3,405.90
79.5
3,485.40
-31.8
1,254.90
107
636.3
242.3
699
2,907.70
577.7
84.5
662.2
10.2
652
575.4
1,227.40
256.9
970.5
-74.4
896.1
100
3,954.70
44.81
Profitability Highlights:




Top line of the company has increased YoY from 830 Cr to 970 Cr
Co has exceptional item of rs 268.4 Cr exceptional item was on account of the previously deferred amounts
of Rs 268 crore relating to clinical trial and development activities of insulin products with its Mexican
partner, Lab PiSA
The firm’s contract research arm Syngene had contributed about 33% to Biocon revenues.
If we exclude the exceptional item PAT has gone down QoQ by 6%, on including the exceptional item the PAT
has gone up by 217%
Page 9
Source: Company, www.dynamiclevels.com
Balance Sheet (In Mn)
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Total Current Assets(A)
Cash & Near Cash Items
Short Term Investments
Accounts & Notes Receivable
Inventories
Other Current Assets
Total Long-Term Assets(B)
Long Term Investments
Gross Fixed Assets
Accumulated Depreciation
Net Fixed Assets
Other Long Term Assets
Total Assests(A+B)
Total Current Liabilities (C)
18,072
2,984
5,421
4,958
4,137
572
17,784
478
19,766
6,327
13,439
3,867
35,856
10,606
19,997
2,836
7,310
4,917
3,783
1,151
19,453
511
23,217
7,852
15,365
3,577
39,450
10,158
22,400
4,735
7,208
5,097
3,984
1,376
21,761
645
26,610
9,672
16,938
4,178
44,161
9,899
26,388
5,564
9,476
5,998
3,766
1,584
31,118
645
37,577
11,711
25,866
4,607
57,506
13,796
24,626
4,620
6,049
7,705
4,527
1,725
39,128
1,000
44,688
13,943
30,745
7,383
63,754
15,547
39,932
19,213
4,285
8,229
5,114
3,091
44,884
4,123
NA
NA
38,837
1,924
84,816
16,276
Accounts Payable
Short Term Borrowings
Other Short Term Liabilities
Total Long Term Liabilities(D)
Long Term Borrowings
Other Long Term Borrowings
Total Liabilities
Minority Interest
Share Capital & APIC
Retained Earnings & Other Equity
Total Shareholders Equity(E)
Total Liabilities & Equity(C+D+E)
Book Value Per Share
2,965
2,474
5,167
4,545
658
3,887
15,151
377
3,788
16,540
20,705
35,856
102
3,478
1,873
4,807
6,530
698
5,832
16,688
38
3,788
18,936
22,762
39,450
114
3,455
1,033
5,411
6,663
1,640
5,023
16,562
653
3,788
23,158
27,599
44,161
135
3,472
2,575
7,749
12,620
6,062
6,558
26,416
823
3,788
26,479
31,090
57,506
151
4,293
3,476
7,778
13,779
7,696
6,083
29,326
1,722
3,788
28,918
34,428
63,754
164
5,471
3,949
6,856
24,872
20,724
4,148
41,148
3,112
1,000
39,556
43,668
84,816
203
Balance Sheet Highlights:
 Total assets of the company has 136% which shows that overall growth of BIOCON has more than doubled in
last 6 years
 Long term Borrowing of the company has almost doubled YoY, BIOCON is mainly investing on expansion and
R&D, with the expectation of creating positive cashflows in the years to come.
 Book Value has doubled in 6 years from 102 to 203.
 Biocon has retained good portion of earnings from 16540 to 39556 million
Page 10
Source: Company, www.dynamiclevels.com
Cash Flows (In Mn)
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Net Income
3,675
3,384
5,089
4,138
4,974
Depreciation & Amortization
1,567
1,758
1,793
2,036
2,210
Other Non-Cash Adjustments
2
(480)
76
(548)
(1,215)
Changes in Non-Cash Capital
2,692
980
(1,923)
377
(3,540)
Cash From Operating Activities
7,936
5,642
5,035
6,003
2,429
6
0
1
28
--
(1,890)
(2,745)
(3,586)
(7,885)
(8,381)
Increase in Investments
(825)
(1,541)
(1,981)
(2,479)
--
Decrease in Investments
21,105
823
1,643
2,170
--
Other Investing Activities
(21,730)
(473)
(236)
(1,623)
2,967
Cash From Investing Activities
(3,334)
(3,936)
(4,159)
(9,789)
(5,414)
Dividends Paid
(768)
(997)
(1,162)
(1,755)
(1,446)
Change in Short Term Borrowings
(594)
(535)
(1,028)
1,634
171
Increase in Long Term Borrowings
623
174
1,191
4,579
3,247
Decrease in Long Term Borrowings
(1,769)
(215)
(206)
(186)
(145)
97
348
1,379
344
105
Cash From Financing Activities
(2,411)
(1,225)
174
4,616
1,932
Net Changes in Cash
2,191
481
1,050
830
(1,053)
Free Cash Flow (CFO-CAPEX)
6,046
2,897
1,449
(1,882)
(5,952)
Free Cash Flow To Firm
6,106
2,941
1,483
(1,870)
(5,932)
Free Cash Flow To Equity
4,312
2,321
1,407
4,173
(2,679)
Free Cash Flow per Share
30.92
14.79
7.40
(9.59)
(29.76)
Disposal of Fixed Assets
Capital Expenditures
Other Financing Activities
Cash Flow Highlights:
 BIOCON has incurred capital expenditure due to which overall cash flow of the Company has become
negative
 Operating Cash flow is positive but declined due to deal with Syngene.
Page 11
Source: Company, www.dynamiclevels.com
Ratio Analysis
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Valuation Ratios
Price Earnings
19.85
13.84
10.53
20.13
18.87
10.79
EV to EBIT
17.31
11.74
11.80
15.21
19.42
17.48
EV to EBITDA
12.17
7.76
8.09
10.94
13.42
12.31
Price to Sales
3.77
2.29
2.16
2.89
3.04
2.84
Price to Book
3.39
2.10
2.03
2.80
2.87
2.38
Dividend Yield
0.01
0.02
0.03
0.01
0.01
0.01
EBITDA Margin
0.29
0.25
0.23
0.25
0.23
0.24
Operating Margin
0.21
0.17
0.16
0.18
0.16
0.17
Profit Margin
0.21
0.17
0.20
0.14
0.16
0.26
Return on Assets
0.11
0.09
0.12
0.08
0.08
0.12
Return on Equity
0.19
0.16
0.20
0.14
0.16
0.24
Current Ratio
1.70
1.97
2.26
1.91
1.58
2.45
Quick Ratio
1.26
1.48
1.72
1.52
1.18
1.95
52.90
67.24
97.70
35.46
31.52
56.64
Tot Debt/Capital
0.13
0.10
0.09
0.22
0.25
0.36
Tot Debt/Equity
0.15
0.11
0.10
0.28
0.32
0.57
Asset Turnover
0.55
0.54
0.59
0.57
0.51
0.46
Accounts Receivable Turnover
3.80
4.15
4.96
5.19
4.51
4.28
Accounts Payable Turnover
2.86
2.43
2.95
3.03
3.28
NA
Effective Tax Rate
0.15
0.14
0.16
0.20
0.15
0.21
Profitability Ratios
Leverage & Coverage Ratios
Interest Coverage Ratio (EBIT/I)
Others
Ratio Analysis:
 Biocon’s debt equity has increased but still the company is managing to maintain it below 1 benchmark of
pharma industry
 Return on Asset has increased yoy by 50% from 0.08 to 0.12
 Return on Equity has increased yoy by 50% from 0.16 to 0.24
 Biocon’s Interest Coverage ratio is very good 56.64 which signifies company has enough earnings (EBIT) to
repay its increasing debt.
Page 12
Source: Company, www.dynamiclevels.com
Peer Comparison
Company Name:
Latest Fiscal Year:
52-Week High
52-Week High Date
52-Week Low
52-Week Low Date
Daily Volume
Current Price:
52-Week High % Change
52-Week Low % Change
Total Common Shares
Market Capitalization
Total Debt
Minority Interest
Cash and Equivalents
Current Enterprise Value
BIOCON WOCKHARDT
CIPLA
LTD
LTD
LTD
03/2016
03/2016
03/2015
628.50
1,748.20
748.00
5/4/2016
12/2/2015
8/17/2015
395.30
705.75
494.55
8/24/2015
2/12/2016
3/29/2016
389,572
580,864
331,729
617.55
963.25
535.00
-1.7%
-44.9%
-28.5%
56.2%
36.5%
8.2%
200.0
110.5
803.0
123,510.0
106,440.0
429,810.6
24,673.0
22,041.9
17,033.3
3,112.0
4,703.7
1,804.8
23,498.0
14,781.1
9,354.9
127,797.0
118,404.5 441,078.9
AUROBINDO
PHARMA
03/2015
891.50
12/30/2015
582.00
2/25/2016
701,934
817.40
-8.3%
40.4%
584.0
478,317.6
NA
NA
NA
514,102.6
LUPIN
SUN
LTD
PHARMA
03/2015
03/2015
2,129.00
1,010.10
10/6/2015
5/25/2015
1,280.00
704.00
3/29/2016 11/24/2015
203,378
763,878
1,609.55
806.10
-24.4%
-20.2%
25.7%
14.5%
449.5
2,071.2
725,419.0
1,940,015.7
NA
NA
NA
NA
NA
NA
725,758.3 1,902,859.9
Above table shows that among all the peers BIOCON is the strongest having hit 52 week high recently in 2016 while
all the shares have hot 52 week low in 2016
Price & Volume Comparison
INSTRUMENT
Price
Avg. Volume
Market
Cap (Rs.
in Cr)
BIOCON
617
1140382
12207
AUROBINDO
815
1621480
47773
PHARMA
CIPLA
535
1968193
43109
LUPIN
1609
1103972
72355
SUN PHARMA
803
2564929
193816
WOCKHARDT
958
991621
10501
BIOCON is a Midcap Company with good average
volume
INSTRUMENT
BIOCON
AUROBINDO PHARMA
CIPLA
LUPIN
SUN PHARMA
WOCKHARDT
FII Holding & P/E Ratio Comparison
Int.
INSTRUMENT
% FII
P/E
Debt
Coverage
Holding Ratio Equity
BIOCON
13.63 13.62
0.32
84.15
AUROBINDO
28.78 26.19
0.75
16.64
PHARMA
CIPLA
9.85 25.59
0.16
13.83
LUPIN
37.03 35.97
0.05
393.41
SUN PHARMA
26.41 49.79
0.3
14.53
WOCKHARDT
2.23 32.26
0.54
14.05
BIOCON has lowest PE ratio, with low Debt equity and
high interest coverage ratio.
Price Performance Comparison
Price
1M
617.3
13.79
815.6
7.7
535.1
6.36
1609.7
4.24
803.95
-0.79
958
-0.76
3M
33.41
18.1
-0.38
-13.36
-5.9
-0.59
6M
39.38
-1.79
-16.41
-10.33
10.02
-38.2
1Y
40.63
27.08
-18.05
-9.32
-14.35
-26.2
BIOCON is the top performer given highest return in last 1 year where its peers have given negative return.
Page 13
Source: Company, www.dynamiclevels.com
Shareholding Pattern
Shareholding Pattern
Mar-16
Dec-15
Sep-15
Jun-15
Promoter and Promoter Group (%)
60.72
60.72
61.02
61.02
Indian
39.92
39.92
39.92
39.92
Foreign
20.80
20.80
21.10
21.10
Institutions (%)
19.35
19.77
19.21
19.91
FII
13.63
12.80
11.83
11.59
DII
5.72
6.97
7.38
8.33
NonInstitutions (%)
19.93
19.51
19.76
19.06
Bodies Corporate
NIL
NIL
1.44
1.55
Others
17.99
17.66
18.32
17.51
Custodians
1.94
1.85
NIL
NIL
Total no. of shares (cr.)
20.00
20.00
20.00
20.00
BIOCON’S shareholding shows that FII investment has been contact throughout the year
Persons holding securities more than 1% of
total number of shares under category
Public Shareholding.
Glentec International
Kiran Mazumdar Shaw
ARUN SURESH CHANDAVARKAR
Franklin Templeton Investment funds
KIRAN MAZUMDAR SHAW - Trust
LIC of India Health Protection Plus fund
MURALI KRISHNAN K N
RELIANCE CAPITAL TRUSTEE CO. LTD
Swiss Finance Corporation (Mauritius) Ltd
Category
Promoters
Promoters
Non Promoters
Non Promoters
Non Promoters
Non Promoters
Non Promoters
Non Promoters
Non Promoters
Mar-15
61.02
40.42
20.60
19.10
10.73
8.37
19.87
2.65
17.23
NIL
20.00
Mar-16
Dec-15
Sep-15
Jun-15
Mar-15
19.77
39.64
1.1
3.02
1.75
1.55
1.05
1.23
NIL
19.77
39.64
1.1
NIL
1.75
2.36
1.05
1.28
NIL
19.77
1.86
1.1
2.93
NIL
2.5
1.14
NIL
1.03
19.77
39.64
1.1
2.79
NIL
2.93
1.14
NIL
NIL
19.77
39.64
1.1
2.7
NIL
3.12
1.14
NIL
NIL
Promoters of BIOCON have kept their investment constant throughout the year
Page 14
Source: Company, www.dynamiclevels.com
0.53%
3.97%
Geographic Ownership Distribution
Unknown Country
79.14%
United States
9.49%
India
5.75%
Luxembourg
3.97%
Britain
0.53%
Finland
0.28%
Ireland
0.27%
Others
0.57%
0.28%
5.75%
0.27%
0.57%
9.49%
India
Luxembourg
79.14%
Ireland
4.23%
1.98%
75.24%
Investment Advisor
4.23%
Government
1.98%
75.24%
Individual
Government
Ownership
(Institutiona
l)
Ownership Statistics
Shares Outstanding (M)
200.0
Float
33.8%
Ownership (Institutional)
36.80%
Ownership (Retail & Other)
18.34%
Ownership (Insider)
44.85%
Page 15
Other
Investment
Advisor
18.55%
18.55%
Individual
Britain
Finland
Institutional Ownership Distribution
Other
Unknown
Country
United States
44.85%
36.80%
18.34%
Ownership
(Retail &
Other)
Ownership
(Insider)
Source: Company, www.dynamiclevels.com
BIOCON enters Developed Market for
the 1st time ever.

BIOCON received first regulatory approval in a developed
country to sell its biosimilar product 'Insulin Glargine' in
Japan.

In Japan BIOCON will be partnering with FUJIFILM Pharma
the key pharma Co in that country.

This is the first biosimilar that would enter Japan from any
non multinational company (MNC). Japan has only 3
players for the product currently.

This will offer business worth USD 8-10 billion from FY17.

This deal will also help BIOCON enter other developed
markets especially US and Europe.

Insulin is almost approaching USD 100 million businesses;
this is a significant regulatory approval that will enable
BIOCON to exponentially grow its insulin and insulin
analogue business in the years to come.

The company hopes to enable the Japanese government to
bring down its healthcare expenditure on diabetes with the
use of this cost effective, high quality biosimilar Insulin
Glargine.

The company aims to capture a significant share of the
Japanese Glargine market of USD 144 million which is the
second largest market outside of North America and
Europe and is largely dominated by disposable pens.
Page 16
Source: Company, www.dynamiclevels.com
Investment Rationale











The global market opportunity for biosimilars is estimated to
reach US$24 billion in 2019.
The Indian pharmaceutical market size is expected to grow to
US$ 100 billion by 2025, driven by increasing consumer
spending, rapid urbanization, and raising healthcare insurance
among others.
Big Pharma is beginning to realize that global priorities are
shifting from providing exclusive and expensive drugs to more
affordable drugs which can help enhance access.
The opportunities are in the fast-growing emerging markets,
where the old business model of expensive medicines targeted
at niche populations of affluent patients will not work.
Biocon has been driven by its strategy to provide affordable
access to advanced biopharmaceuticals for global patient
populations. Through ‘Exclusively inclusive’ approach, BIOCON
is developing a specialty portfolio of products that can benefit
millions of patients the world over.
BIOCON has set out to build global reach and economies of
scale and is steadfastly investing in developing a range of
affordable therapies for diabetes, cancer and autoimmune
diseases, most of which were previously unaffordable and
hence inaccessible to many.
The biotech industry is fast approaching its own patent cliff.
Some recent biosimilars approvals are beginning to make a
difference by increasing accessibility for a larger patient
population. Biocon, with its rich pipeline of biosimilars under
development, is at the right place at the right time.
BIOCON’s aim over the next 10 years is to provide Biocon’s
Insulin products to one in five diabetic patients in need of
insulin-based therapy, anywhere in the world.
BIOCON is the largest producers of insulins in Asia. Over the
past decade, more than a million patients have benefited from
Biocon’s inclusive diabetes management portfolio.
The on-time commissioning of the Malaysia plant, designed as
Asia’s largest integrated insulins manufacturing facility, has put
BIOCON on track to become one of the world’s largest insulin
producers.
BIOCON’s entry into Japan will offer business worth USD 8-10
billion from FY17
Biosimilars: Indian Positioning
We recommend BUY in BIOCON @ 560-580 with the Target of 750 as BIOCON is the
Market leader globally in biopharma and is trading at a very low PE of 14 compared to
industry PE of 42.
Page 17
Source: Company, www.dynamiclevels.com
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Page 18
Source: Company, www.dynamiclevels.com