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Business News/ Companies / Company-results/  Biocon posts flat growth in September quarter profit and sales
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Biocon posts flat growth in September quarter profit and sales

The net profit of the company stayed flat at Rs102 crore

The growth of our core biopharma business this quarter has been muted largely due to capacity constraints and geo-political challenges in the Middle East, said Kiran Mazumdar-Shaw. Photo: Aniruddha Chowdhury/MintPremium
The growth of our core biopharma business this quarter has been muted largely due to capacity constraints and geo-political challenges in the Middle East, said Kiran Mazumdar-Shaw. Photo: Aniruddha Chowdhury/Mint

Mumbai: Statins and biopharmaceuticals maker Biocon Ltd late Tuesday reported flat September quarter net profit and a marginal increase in sales.

Net profit at 102 crore and a 3% sales growth at 773 crore were less than expected, said a sector analyst who had predicted growth of 11% and 15% in quarterly profit and sales.

“The growth of our core biopharma business this quarter has been muted largely due to capacity constraints and geo-political challenges in the Middle East," Biocon chairman and managing director Kiran Mazumdar-Shaw said in a statement.

Biocon’s branded formulations business, which is comparatively new and small, however, grew 17%.

“The company posted lower than expected growth across business segments," said Hitesh Mahida, a pharma sector analyst at Antique Stock Broking Ltd. “Its operational profit also came in 10% lower than anticipated, although it was slightly aided by 9.3 crore licensing income," he added.

However, the Biocon management sounded confident of growth in the immediate future.

“Clinical progress in our key global programs for generic Insulin Glargine and Trastuzumab is indicative of the value accretion that is realizable in the foreseeable future," said Shaw.

Biocon expects its Malaysia production facility to be commissioned by the second half of this financial year. Its strategic partner in the insulin business—Mylan Inc. has already initiated multicenter phase- III trials for insulin Glargine in the US.

“We continue to remain cautious on the stock due to lack of any major near and medium term triggers," cautions Mahida of Antique Broking.

During the quarter, Biocon acquired 7.69% stake in its subsidiary Syngene International from GE Equity International for 215.38 crore. Subsequently, the company sold 10% stake in Syngene, owned by its subsidiary Biocon Research Ltd BRL) for 380 crore to Silver Leaf Oak, investment vehicle of PE group India Value Fund Advisors.

“The strategic investment by Silver Leaf Oak in Syngene validates the strength of our research services business and sets a good valuation benchmark. Whilst we continue to invest in R&D and capacity building for our insulins and antibodies portfolio, we expect Branded Formulations and Research Services businesses to drive growth in the interim," Shaw said.

At 10.48am on Wednesday, Biocon shares were down 1.09% to 474.50 on the BSE, while the benchmark 30-share Sensex rose 0.75%.

Lohit Jagwani contributed to this story

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Published: 22 Oct 2014, 10:23 AM IST
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