Biocon Gets Investec's 'Buy' Initiation As Strong Upside Seen On Biosimilars, Generics
With fiscal 2025 being a low base year due to losses, earnings per share are forecast to more than double by financial year 2028, said Investec.
Investec has initiated coverage on Biocon Ltd. with a ‘buy’ rating and a target price of Rs 400, citing its strong positioning in the global biosimilars market and robust growth potential across its business segments. While the company is well set up for expansion, Investec highlights that successful execution—particularly timely launches and market share gains—will be critical to delivering results.
Biocon is expected to benefit significantly from its growing presence in biosimilars, especially in the US market.
The company’s biosimilars pipeline includes upcoming launches of bevacizumab and insulin aspart, both targeting significant market opportunities.
Biocon is also preparing for the launch of aflibercept in Canada and the US by the second half of 2026, which could benefit from a year of exclusivity. Other longer-term opportunities include denosumab, pertuzumab, and several undisclosed biosimilar assets currently in clinical development.
In its generics segment, Biocon is positioned to capitalise on GLP-1 therapies such as liraglutide and semaglutide. With limited competition in the US and strong potential across emerging markets, Europe, and Canada, these products are expected to generate meaningful revenues in the near term. The company is also planning complex generic launches, which should further enhance earnings growth.
Biocon’s contract research and manufacturing division, Syngene, is forecast to grow at a steady pace, supported by improved capacity utilisation and an increasing trend of outsourcing to India.
To address its debt burden of $1.1 billion, Biocon is considering restructuring options, including a potential merger of its biosimilars and generics businesses or an IPO of the biosimilars unit. Management has indicated that more details on this will be provided in due course.
Investec projects a 15% compound annual growth rate in revenue over financial year 2025–2028, driven by high-margin product launches and operating leverage. Ebitda margin is expected to improve by 540 basis points over the same period. With fiscal 2025 being a low base year due to losses, earnings per share are forecast to more than double by financial year 2028. Overall, Biocon is seen as well-positioned for long-term growth, with execution and balance sheet management being the key watchpoints.
