Sales of Research service segment has gone up 17.44% to Rs 610.20 crore (accounting for 32.20% of total sales).  Sales of Generics segment has gone down 12.22% to Rs 530.00 crore (accounting for 27.97% of total sales).  Sales of segment has gone up 9.82% to Rs 742.50 crore (accounting for 39.19% of total sales).  Inter-segment sales rose Rs 49.70 crore to Rs 54.40 crore.  

Profit before interest, tax and other unallocable items (PBIT) has jumped 29.02% to Rs 276.10 crore.  PBIT of Novel Biologics segment rose 98.37% to Rs -60.90 crore (accounting for -22.06% of total PBIT).  PBIT of Research service segment rose 19.85% to Rs 112.90 crore (accounting for 40.89% of total PBIT).  PBIT of Generics segment fell 28.55% to Rs 49.80 crore (accounting for 18.04% of total PBIT).  PBIT of segment rose 115.72% to Rs 174.30 crore (accounting for 63.13% of total PBIT).  

PBIT margin of Research service segment rose from 18.13% to 18.50%.  PBIT margin of Generics segment fell from 11.54% to 9.40%.  PBIT margin of segment rose from 11.95% to 23.47%.  Overall PBIT margin rose from 11.89% to 14.57%.  

Operating profit margin has jumped from 22.37% to 24.22%, leading to 13.90% rise in operating profit to Rs 445.80 crore.  Raw material cost as a % of total sales (net of stock adjustments) decreased from 34.52% to 31.56%.   Purchase of finished goods cost rose from 1.14% to 1.75%.   Employee cost increased from 22.89% to 25.04%.   Other expenses fell from 20.69% to 18.34%.   Preoperation capitalised expenses rose from 4.50% to 4.71%.   

Other income rose 576.77% to Rs 104.9 crore.  PBIDT rose 35.34% to Rs 550.7 crore.  Provision for interest rose 246.15% to Rs 22.5 crore.  Loan funds rose to Rs 4,743.20 crore as of 30 September 2021 from Rs 2,687.40 crore as of 30 September 2020.  Inventories rose to Rs 2,272.70 crore as of 30 September 2021 from Rs 1,642.10 crore as of 30 September 2020.  Sundry debtors were lower at Rs 1,159.60 crore as of 30 September 2021 compared to Rs 1,228.10 crore as of 30 September 2020.  Cash and bank balance rose to Rs 1,668.60 crore as of 30 September 2021 from Rs 1,417.70 crore as of 30 September 2020.  Investments rose to Rs 1,824.40 crore as of 30 September 2021 from Rs 949.70 crore as of 30 September 2020 .  

PBDT rose 31.92% to Rs 528.2 crore.  Provision for depreciation rose 13.39% to Rs 201.5 crore.  Fixed assets increased to Rs 9,728.60 crore as of 30 September 2021 from Rs 7,376.70 crore as of 30 September 2020.  Intangible assets declined from Rs 1,110.40 crore to Rs 26.40 crore.  

Profit before tax grew 46.70% to Rs 326.70 crore.  Share of profit/loss was 912% lower at Rs -50.6 crore.  Provision for tax was expense of Rs 46.3 crore, compared to Rs 22.3 crore.  Effective tax rate was 22.48% compared to 10.24%.

Minority interest decreased 18.01% to Rs 21.40 crore.  Net profit attributable to owners of the company decreased 18.31% to Rs 138.30 crore.  

Equity capital increased from Rs 600.00 crore as of 30 September 2020 to Rs 600.30 crore as of 30 September 2021.  Per share face Value remained same at Rs 5.00.  

Promoters' stake was 60.64% as of 30 September 2021 ,compared to 60.67% as of 30 September 2020 .  

For year-to-date (YTD) results analysis.

Net sales (including other operating income) of Biocon has increased 4.57% to Rs 3601 crore.  Sales of Research service segment has gone up 28.00% to Rs 1,204.70 crore (accounting for 32.17% of total sales).  Sales of Generics segment has gone down 17.05% to Rs 1,016.30 crore (accounting for 27.14% of total sales).  Sales of Biosimilars segment has gone up 9.72% to Rs 1,500.60 crore (accounting for 40.07% of total sales).  Inter-segment sales rose Rs 90.50 crore to Rs 143.70 crore.  

Profit before interest, tax and other unallocable items (PBIT) has slumped 4.37% to Rs 441.90 crore.  PBIT of Novel Biologics segment rose 137.90% to Rs -119.90 crore (accounting for -27.13% of total PBIT).  PBIT of Research service segment rose 29.35% to Rs 207.60 crore (accounting for 46.98% of total PBIT).  PBIT of Generics segment fell 52.29% to Rs 79.10 crore (accounting for 17.90% of total PBIT).  PBIT of Biosimilars segment rose 47.74% to Rs 275.10 crore (accounting for 62.25% of total PBIT).  

PBIT margin of Research service segment rose from 17.05% to 17.23%.  PBIT margin of Generics segment fell from 13.53% to 7.78%.  PBIT margin of Biosimilars segment rose from 13.61% to 18.33%.  Overall PBIT margin fell from 13.08% to 11.80%.  

Operating profit margin has declined from 23.37% to 23.19%, leading to 3.78% rise in operating profit to Rs 835.10 crore.  Raw material cost as a % of total sales (net of stock adjustments) increased from 32.39% to 34.26%.   Purchase of finished goods cost rose from 1.59% to 2.16%.   Employee cost increased from 23.25% to 24.00%.   Other expenses fell from 20.12% to 17.68%.   Preoperation capitalised expenses fell from 4.61% to 4.49%.   

Other income rose 350% to Rs 152.1 crore.  PBIDT rose 17.73% to Rs 987.2 crore.  Provision for interest rose 123.16% to Rs 42.4 crore.  Loan funds rose to Rs 4,743.20 crore as of 30 September 2021 from Rs 2,687.40 crore as of 30 September 2020.  Inventories rose to Rs 2,272.70 crore as of 30 September 2021 from Rs 1,642.10 crore as of 30 September 2020.  Sundry debtors were lower at Rs 1,159.60 crore as of 30 September 2021 compared to Rs 1,228.10 crore as of 30 September 2020.  Cash and bank balance rose to Rs 1,668.60 crore as of 30 September 2021 from Rs 1,417.70 crore as of 30 September 2020.  Investments rose to Rs 1,824.40 crore as of 30 September 2021 from Rs 949.70 crore as of 30 September 2020 .  

PBDT rose 15.29% to Rs 944.8 crore.  Provision for depreciation rose 15.04% to Rs 396.3 crore.  Fixed assets increased to Rs 9,728.60 crore as of 30 September 2021 from Rs 7,376.70 crore as of 30 September 2020.  Intangible assets declined from Rs 1,110.40 crore to Rs 26.40 crore.  

Profit before tax grew 15.47% to Rs 548.50 crore.  Share of profit/loss was 1,140.70% lower at Rs -106.7 crore.  Provision for tax was expense of Rs 103.6 crore, compared to Rs 103.2 crore.  Effective tax rate was 27.87% compared to 22.13%.

Minority interest increased 2.02% to Rs 45.40 crore.  Net profit attributable to owners of the company decreased 30.12% to Rs 222.70 crore.  

Equity capital increased from Rs 600.00 crore as of 30 September 2020 to Rs 600.30 crore as of 30 September 2021.  Per share face Value remained same at Rs 5.00.  

Promoters' stake was 60.64% as of 30 September 2021 ,compared to 60.67% as of 30 September 2020 .  

Full year results analysis.

Net sales (including other operating income) of Biocon has increased 13.37% to Rs 7143.1 crore.  Sales of Research service segment has gone up 8.57% to Rs 2,184.30 crore (accounting for 29.69% of total sales).  Sales of Generics segment has gone up 7.05% to Rs 2,362.70 crore (accounting for 32.11% of total sales).  Sales of Biosimilars segment has gone up 20.95% to Rs 2,800.20 crore (accounting for 38.06% of total sales).  Inter-segment sales came down from Rs 233.50 crore to Rs 214.60 crore.  

Profit before interest, tax and other unallocable items (PBIT) has slumped 3.36% to Rs 1,070.50 crore.  PBIT of Novel Biologics segment fell 80.40% to Rs -20.40 crore (accounting for -1.91% of total PBIT).  PBIT of Research service segment fell 2.56% to Rs 434.20 crore (accounting for 40.56% of total PBIT).  PBIT of Generics segment fell 13.86% to Rs 291.50 crore (accounting for 27.23% of total PBIT).  PBIT of Biosimilars segment fell 14.63% to Rs 365.20 crore (accounting for 34.11% of total PBIT).  

PBIT margin of Research service segment fell from 22.15% to 19.88%.  PBIT margin of Generics segment fell from 15.33% to 12.34%.  PBIT margin of Biosimilars segment fell from 18.48% to 13.04%.  Overall PBIT margin fell from 16.95% to 14.55%.  

Operating profit margin has declined from 25.44% to 23.14%, leading to 3.10% rise in operating profit to Rs 1,652.80 crore.  Raw material cost as a % of total sales (net of stock adjustments) increased from 32.38% to 32.69%.   Purchase of finished goods cost rose from 1.31% to 1.39%.   Employee cost increased from 22.44% to 23.42%.   Other expenses rose from 19.21% to 20.26%.   Preoperation capitalised expenses fell from 5.32% to 4.72%.   

Other income rose 57.68% to Rs 254.5 crore.  PBIDT rose 8.09% to Rs 1907.3 crore.  Provision for interest fell 11.09% to Rs 57.7 crore.  Loan funds rose to Rs 4,481.10 crore as of 31 March 2021 from Rs 1,979.70 crore as of 31 March 2020.  Inventories rose to Rs 1,866.60 crore as of 31 March 2021 from Rs 1,435.90 crore as of 31 March 2020.  Sundry debtors were lower at Rs 1,217.60 crore as of 31 March 2021 compared to Rs 1,223.70 crore as of 31 March 2020.  Cash and bank balance rose to Rs 2,015.40 crore as of 31 March 2021 from Rs 998.60 crore as of 31 March 2020.  Investments rose to Rs 1,951.90 crore as of 31 March 2021 from Rs 966.10 crore as of 31 March 2020 .  

PBDT rose 8.83% to Rs 1849.6 crore.  Provision for depreciation rose 29.50% to Rs 715.1 crore.  Fixed assets increased to Rs 9,137.70 crore as of 31 March 2021 from Rs 8,140.70 crore as of 31 March 2020.  Intangible assets stood at Rs 26.40 crore.  

Profit before tax down 1.12% to Rs 1,134.50 crore.  Share of profit/loss were nil in both the periods.  Extraordinary items were decreased to Rs 12.60 crore.  Provision for tax was expense of Rs 221.5 crore, compared to Rs 315.1 crore.  Effective tax rate was 20.75% compared to 25.94%.

Minority interest decreased 13.85% to Rs 105.70 crore.  Net profit attributable to owners of the company decreased 4.71% to Rs 740.50 crore.  

Equity capital stood at Rs 600.00 crore as of 31 March 2021 to Rs 600.00 crore as of 31 March 2020.  Per share face Value remained same at Rs 5.00.  

Promoters' stake was 60.67% as of 31 March 2021 ,compared to 60.67% as of 31 March 2020 .  

Cash flow from operating activities decreased to Rs 1,159.70 crore for year ended March 2021 from Rs 1,283.10 crore for year ended March 2020.  Cash flow used in acquiring fixed assets during the year ended March 2021 stood at Rs 1,746.30 crore, compared to Rs 1,836.50 crore during the year ended March 2020. 

Other Highlights

Biocon Biologics Limited (BBL), a subsidiary of Biocon Ltd announced that Express Scripts, a leading pharmacy benefit management organization in the US, will list Biocon Biologics interchangeable biosimilar Insulin Glargine (long active insulin that provides suger control) as a preferred glargine brand on its National Preferred Formulary (NPF). Biocon Biologics co-developed Semglee with with Commercial Partner Viatris.

Company Entered into a strategic alliance with Serum Institute Life Sciences (SILS) for a foray into vaccines. It will get committed access to 100 million doses of SILS' vaccines annually for 15 years in exchange for 15% stake at a post-money valuation of USD 4.9 billion. (approx Rs 36,500 crore).

Management commentary: Dr Arun Chandavarkar, Managing Director, Biocon Biologics said : "The inclusion of our interchangeable biosimilar insulin glargine in Express Scripts' National Preferred Formulary (NPF) in the U.S. is a major milestone for Biocon Biologics. It furthers our mission of enabling affordable access to quality insulins to a large number of patients. We expect our partner to commercialize the product in the U.S. by end of the year and formulary coverage to begin in Jan 2022, making it an important growth driver for Biocon Biologics."

"We believe adoption of biosimilars through PBMs like Express Scripts, will drive down the high cost of biologics therapy for chronic diseases like diabetes. Our biosimilar Insulin Glargine has the potential to bring significant cost savings for patients, employers and PBMs,"

Kiran Mazumdar-Shaw, Executive Chairperson, Biocon and Biocon Biologics, said "Biocon reported Q2FY22 revenue growth of 10% at Rs 1,945 Crore, primarily driven by good performance of the Research Services and Biosimilars business segments, which reported a growth of 17% and 10%, respectively. EBITDA at Rs 551 Crore was up by 35% and PBT (before exceptional items) at Rs 276 Crore went up by 27%. The exceptional item relates to modification of the optionally convertible debentures of a PE investment in Biocon Biologics and reversal of SEIS claims relating to a prior period. Net Profit for Q2FY22, before such exceptional items, was Rs 188 Crore, up 11%. Our Core EBITDA margins for the quarter were at a healthy 33%.

"Biocon Biologics made strategic moves this quarter which will drive future growth of our Biosimilars business and deliver long term value for our shareholders. The U.S. FDA's approval of Semglee® as the first interchangeable biosimilar product under the 351(k) regulatory pathway, is a historic milestone for both Biocon and Viatris, and will enable us to expand patient access to our Insulin Glargine. This has led to Semglee's inclusion as a preferred Insulin Glargine brand on the National Preferred Formulary® of Express Scripts, a leading Pharmacy Benefit Manager (PBM). We expect the formulary coverage to begin in January 2022 and believe Semglee has the potential to bring significant cost savings for patients, employers and PBMs. "The quarter also marked Biocon Biologics' strategic entry into vaccines & the infectious diseases segment through key partnerships with Serum Institute Life Sciences and Adagio Therapeutics. "With the waning pandemic and improvements in supply chain conditions, I believe all three business segments, Generics, Biosimilars and Research Services, are well positioned for sustained growth in H2FY22,"

Commenting on the Generics segment performance, Siddharth Mittal, CEO & Managing Director, Biocon Limited, said "The Generics business witnessed a muted performance for the quarter as we encountered continuing pricing pressure in the US for our formulations portfolio, and a slower than expected ramp up of demand for some of our key APIs. Operational and supply challenges in the earlier part of the quarter also impacted the performance of the API business. There was advance buying by customers in the corresponding period of the previous fiscal, apprehending COVID related disruptions and is reflected in the year-on-year decrease in revenues. We continue to make progress on expanding our formulations portfolio with the launch of Everolimus tablets in the US in October, which reaffirms our commitment to establish a strong global footprint of complex formulations to treat chronic conditions. Looking ahead, we will stay focused on our capacity enhancement projects along with several other strategic initiatives to increase operational efficiencies, which will help us deliver on our mission to make affordable healthcare accessible."

Commenting on the biosimilars performance, Dr Arun Chandavarkar, Managing Director, Biocon Biologics Ltd. said: "The key highlight this quarter was the USFDA approval of our bGlargine as the world's first interchangeable biosimilar paving the way for a robust growth of this product. The preferred formulary status for our bGlargine at Express Scripts, USA, which covers 28 million lives, is an outcome of this interchangeable designation. "Biocon Biologics' revenue from operations grew 10% to Rs 743 Crore this quarter, supported by continued market share gains in developed markets and strong growth in India & emerging markets. This business performance coupled with a focus on costs, is reflected in our highest reported Core EBITDA of Rs 304 Crore at a healthy 42% margin. "We also took a strategic decision to leverage our biologics capabilities to make a meaningful impact in infectious diseases. We partnered with Adagio Therapeutics for a novel antibody for treatment and prevention of COVID-19. Thereafter, we entered into a strategic alliance with Serum Institute Life Sciences which gives us access to a 100 million doses vaccine capacity (with assured revenues and related margins) and their portfolio of vaccines. "Our vertically integrated strengths in biosimilars and expansion into the infectious disease segment, provides a strong impetus for a robust and sustainable growth over the next few years,"

Commenting on the performance of research services, Jonathan Hunt, CEO & Managing Director, Syngene said: "The second quarter was characterized by positive performances in all divisions. In Discovery Services, we saw excellent client demand, particularly within the emerging biopharma segment, as well as further expansion of our relationships with existing clients and our long-term partners in the dedicated research centers. "During the quarter, we continued to manufacture Remdesivir for COVID-19, under a voluntary licensing agreement from Gilead. The quarter also saw continued investment in new technologies and the successful implementation of several digitization and automation projects across our operations. These investments play an important role in enhancing productivity, reducing the impact of human error and improving quality systems across our business. "We are pleased to have delivered a strong performance in the first half of the year. Careful management of costs, coupled with a robust business continuity plan, enabled us to continue to build capability and capacity to meet the growing requirements of our clients. Notwithstanding the continuing uncertainty of the pandemic, we believe that we are well positioned to deliver our guidance of mid-teens revenue growth for the full year."