Analyst Concall
Biocon expects interest cost savings of INR 3 bln in FY27
This story was originally published at 11:57 IST on 12 November 2025
Register to read our real-time news.Informist, Wednesday, Nov. 12, 2025
Please click here to read all liners published on this story
--Biocon: Aim to save INR 3 bln interest cost annually with debt reduction
--Biocon: Impact of debt reduction to be visible on financials from FY27
--Biocon: Performance of contract research ops in-line with plan
--Biocon: Oct-Dec, Jan-Mar margins to improve due to lower debt
--Biocon: Auto immune biosimilar generic Stelara gained traction in US
--Biocon: Plan to launch immunology products across markets in H2FY26
--Biocon: Started global filing of semaglutide in Canada, Brazil, other mkts
--Biocon: R&D investments focused on GLP-1, injectable pdts
--Biocon: Generics business expected to grow further in Oct-Mar
--Biocon: Expanding biosimilars portfolio, focused on high-value therapies
--Biocon: Continue to invest 7-9% of sales on R&D going forward
--Biocon: Expect Oct-Mar margins in mid-40% range
--Biocon:Biosimilar insulin generic Aspart has huge growth opportunity in US
--Biocon: 60% business comes from API, 40% from formulations in generics
--Biocon:Formulations drove growth in last couple of qtrs, shall do so ahead
--Biocon: Have enough capacity to cater to GLP-1 opportunity globally
By Narayana Krishna and Sunil Raghu
HYDERABAD/AHMEDABAD – Biocon Ltd. is in the process of strengthening its balance sheet by retiring some of its structural debt in a phased manner with an aim to save at least INR 3 billion of interest costs in 2026-27 (Apr-Mar), the company's management said in a post-earnings investor call Wednesday.
The company used some proceeds from its INR 45-billion qualified institutional placement from June to partly retire its structured debt from Goldman Sachs Investment and a fund managed by Kotak Investment Advisors. It also expects to retire some more debt from Edelweiss by Jan. 31. Biocon's management said retiring the structured debt would help improve operating margins in the Oct-Dec and Jan-Mar quarters and that its full impact would be seen in FY27.
As on Sept. 30, Biocon Biologics Ltd., Biocon's biosimilar business subsidiary, which accounts for nearly 61% of the company's consolidated sales, had debt of $1.1 billion on its books. Besides that, the company's generics business as well as listed arm Syngene International Ltd are also sitting on debt. The company didn't provide the details of the debt on these entities.
Late Tuesday, Biocon reported a consolidated net profit of INR 845 million for the September quarter, against a net loss of INR 160 million a year ago. The company's revenue for the reporting quarter was up nearly 20% on year at INR 42.96 billion.
"We have already started seeing margin improvement in Jul-Sept, following the Goldman Sachs exit and we expect this trend to continue through Oct-Dec and Jan-Mar as we see the impact of both Kotak and Edelweiss exits. The full benefit, however, of this debt reduction will be visible from FY27 with annual savings of around INR 300 crore (INR 3 billion) in interest costs," Biocon's management said.
With improving sales and market share gains across regions, the company expects its gross margin to be around mid-40% in Oct-Mar, the management said.
The company expects its biosimilar product portfolio to help drive sustainable growth across geographies going forward. Revenue from the company's biologics segment in the September quarter rose 25% on year to INR 27.21 billion, led by traction in its autoimmune biosimilar drug Stelara in the US.
"In the first quarter of FY25, we had guided to launch five biosimilar products over the next 12 to 18 months and we have delivered on this commitment by launching biosimilars, Ustekinumab, Aspart, Bevacizumab, and Aflibercept across geographies and expect an imminent launch of Denosumab," Biocon said. Its management said biosimilar insulin Aspart, the only biosimilar approved by the US Food and Drug Administration in this category so far, has huge growth potential in the US. The company is working on expediting marketing to improve sales.
Biocon said it was in the process of expanding its biosimilar product portfolio with a focus on high-value therapies. The company is working to launch several of its existing immunology products in global markets during Oct-Mar. Biocon said its contract research, development, and manufacturing organisation unit Syngene International's performance was progressing as per plans.
The company said it would continue to invest 7-9% of its sales on research and development and the upcoming investments were more focused on Glucagon-Like-Peptide-1 and injectable products. For the September quarter, Biocon's R&D spending was up 25% on year at INR 2.51 billion.
The company said its generics business is expected to grow further in Oct-Mar, led by several launches and peptide kind of opportunities. In the September quarter, Biocon's generic segment sales rose 24% on year to INR 7.74 billion. This segment contributes nearly 18% to the total sales. Within the generics segment, 60% sales come from active pharmaceutical ingredients and 40% from formulations. The formulations business has grown in the last couple of quarters and might continue to grow further in the coming years, the company said.
Biocon said it has enough capacity to cater to the upcoming Glucagon-Like-Peptide opportunity globally for the next decade. The company has already started new drug applications for approval in key global markets, including Canada and Brazil, for its semaglutide generic drug used to treat diabetic and obesity patients, it said.
At 1139 IST, shares of the company were at INR 389.25 on the National Stock Exchange, up 1% from the previous close. End
US$1 = INR 88.64
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Nishant Maher
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
