Biocon Stock Plunges 4%: Should Investors Be Concerned?

Biocon's stock plunged 4% to ₹348.3, logging an intraday low, after releasing Q1FY26 earnings. Revenue from operations surged 15% YoY to ₹3,942 crore, while net profit fell over 95% to ₹31.4 crore. Generics revenue advanced 6% YoY to ₹697 crore, while Biosimilars witnessed a growth of 18% YoY to ₹2,458 crore. Brokerage Religare Broking advised investors to avoid fresh buying for now.

Biocon Limited's stock experienced a significant drop of 4% to ₹348.3, reaching an intraday low, following the release of its Q1FY26 earnings. Despite a notable increase in revenue from operations, the company's net profit fell drastically by over 95% to ₹31.4 crore.

The company reported a robust performance in its generics and biosimilars segments. Revenue from operations surged by 15% year-over-year (YoY) to ₹3,942 crore. Generics revenue advanced by 6% YoY to ₹697 crore, while biosimilars revenue witnessed an 18% YoY growth to ₹2,458 crore. However, the net profit decline was attributed to a significant reduction in earnings before tax (PBT) by 72% to ₹97 crore [1].

The stock market's reaction to the earnings report was largely negative, with brokerage Religare Broking advising investors to avoid fresh buying at this time. The company's strong performance in revenue growth was overshadowed by the substantial fall in net profit, which raised concerns among investors [1].

Biocon's Q1FY26 results highlighted the company's continued growth in key business segments. The company's generics business delivered a 6% YoY revenue growth, driven by new drug product launches and higher volumes in the API business. The biosimilars segment, which is a key growth driver for Biocon, saw an 18% YoY increase in revenue, underpinned by robust demand across geographies. The company's strong performance in the biosimilars segment was further bolstered by the launch of Yesafili™ in Canada, its tenth biosimilar globally [1].

However, the company's net profit decline was primarily attributed to a significant reduction in earnings before tax (PBT) by 72% to ₹97 crore. This decline in PBT was driven by a one-time positive impact of Lenalidomide launch quantities in Q4FY25 and capitalization of new manufacturing facilities in the previous fiscal, which impacted margins [1].

In conclusion, while Biocon's Q1FY26 earnings report showcased strong revenue growth across key business segments, the substantial decline in net profit raised concerns among investors. The company's ability to sustain growth and improve profitability will be closely watched by the market in the coming quarters [1].

References:
[1] https://www.biocon.com/biocon-q1fy26-revenue/