biocon (biocon) | 603content.icicidirect.com/mailimages/idirect_biocon_q3fy18.pdf · icici...
TRANSCRIPT
January 29, 2018
ICICI Securities Ltd | Retail Equity Research
Result Update
Biologics, Syngene maintain momentum…
Biocon reported flat YoY revenues at | 1058 crore (I-direct estimate:
| 1073 crore). Biopharmaceutical segment declined 9% YoY to 369
crore while the biologics segment (excluding licensing income) grew
24% to | 178 crore
EBITDA margins contracted 548 bps YoY to 21% (I-direct estimate:
19.4%) mainly due to a below expected gross margin performance
and higher employee cost. EBITDA declined 20% YoY to | 222 crore
against I-direct estimate of | 208 crore
Net profit declined 46% YoY to | 92 crore but came in line with I-
direct estimate of | 90 crore
Well poised to capitalise on global biosimilars opportunity
Biologics segment (~14% of FY17 turnover) includes biosimilars,
encompassing Rh-insulin, insulin analogs, monoclonal antibodies &
recombinant proteins. It is the first Indian pharmaceutical company to
receive biosimilar approval in US. The company has invested heavily in
this space in the last two to three years, especially the Malaysian facility.
So far, the progress has been encouraging with Trastuzumab launch in
US, Glargine launch in Japan besides launches in emerging markets. We
expect biologics to grow at ~36% CAGR to | 1390 crore in FY17-20E.
Research services (Syngene) to maintain growth momentum
Biocon’s contract research organisation (CRO) arm Syngene contributes
~29% to its turnover. The company caters to 293 clients including eight
out of global top 10 global players. This segment has consistently been
growing in double digits and has recently been the major growth driver
for the company as the biopharma segment is slowing down. We expect
revenues to grow at a CAGR of ~16% to | 1833 crore in FY17-20E.
Small molecules under pressure; branded formulations growing decently
Small molecules (~41% of FY17 turnover) comprise APIs like statins,
immunosuppressants, specialty APIs & also include generic formulations
business witness steep pricing pressure. The company is exploring fewer
opportunities but with higher profitability in this segment like moving into
formulations & filing own ANDAs, 505 (b)(2) filing, etc. It has already filed
few ANDAs, which include complex generics & injectables. We expect
small molecules segment to grow at a CAGR 4% CAGR to | 1774 crore in
FY17-20E. The branded formulations (14% of FY17 revenue) includes
finished dosages business in India and overseas including UAE. It
comprises Indian domestic formulations. The company owns 80+ brands
encompassing therapies like diabetology, oncology, nephrology,
cardiology, immunotherapy, comprehensive care and bio-products.
Biosimilar deals, approvals and launches to sustain investors interest
In Q3, the company secured its first biosimilar approval (Trastuzumab) in
the US, also the first by an Indian pharma company. Although
Trastuzumab approval does not imply immediate launch of the product in
the US, it endorses the development and manufacturing capabilities of
Biocon in the realm of biosimilars. The company has also announced its
second partnership in the biosimilar space with Sandoz for global
development of next generation biosimilars. This has again vindicated its
capability in the biologics (biosimilars). Progress on the biosimilars
regulatory front in developed markets and launches in the developed as
well as emerging markets are likely to maintain investors optimism for the
company. We continue to value the stock on SOTP basis. Accordingly, we
arrive at a target price of | 680 per share.
Rating matrix
Rating : Buy
Target : | 680
Target Period : 12 months
Potential Upside : 13%
What’s Changed?
Target Changed from | 560 to | 680
EPS FY18E Changed from | 8.2 to | 8.4
EPS FY19E Changed from | 11.7 to | 11.9
EPS FY20E Changed from | 15.9 to | 16.9
Rating Changed from Hold to Buy
Quarterly Performance
Q3FY18 Q3FY17 YoY (%) Q2FY18 QoQ (%)
Revenue 1,057.9 1,044.4 1.3 968.6 9.2
EBITDA 221.7 276.1 -19.7 182.3 21.6
EBITDA (%) 21.0 26.4 -548 bps 18.8 214 bps
Net Profit 91.9 171.4 -46.4 68.8 33.6
Key Financials
(| Crore) FY17 FY18E FY19E FY20E
Revenues 3921.6 4158.7 4921.5 5801.9
EBITDA 851.2 973.8 1273.1 1557.8
Adj. Net Profit 508.7 501.7 711.3 1015.5
Adj. EPS (|) 8.5 8.4 11.9 16.9
Valuation summary
FY17 FY18E FY19E FY20E
PE(x) 59.1 72.1 50.9 35.6
EV to EBITDA (x) 10.5 9.6 12.3 15.4
Price to book (x) 9.6 10.2 13.9 17.1
RoNW (%) 42.3 36.9 28.1 22.7
RoCE (%) 9.6 10.2 13.9 17.1
Stock data
Particular
Market Capitalisation
Debt (FY17)
Cash (FY17)
EV
52 week H/L 439/268
Equity capital (|Crore)
Face value (|) | 5
| 300 crore
| 37341 crore
Amount
| 36180 crore
| 2205 crore
| 1044 crore
Price performance (%)
1M 3M 6M 1Y
Biocon 17.7 76.2 61.9 86.6
Glenmark 6.0 3.4 -11.8 -29.6
Torrent Pharma -2.6 9.3 10.9 7.7
Aurobindo Pharma -6.5 -15.4 -10.9 -9.4
Research Analyst
Siddhant Khandekar
Mitesh Shah
Harshal Mehta
Biocon (Biocon) | 603
ICICI Securities Ltd | Retail Equity Research Page 2
Variance analysis
Q3FY18 Q3FY18E Q3FY17 Q2FY18 YoY (%) QoQ (%) Comments
Revenue 1,057.9 1,072.6 1,044.4 968.6 1.3 9.2 YoY growth of 24% in biopharma business (ex-licensing income) was largely offset
by lower licensing income and decline in small molecules
Raw Material cost 423.8 418.3 374.7 377.6 13.1 12.2
Employee cost 235.3 236.0 194.2 225.5 21.2 4.3 Increased mainly due to commissioning of Malaysian facility
R & D Expenditure 52.9 71.0 85.0 53.9 -37.8 -1.9
Other Expenditures 124.2 139.4 114.4 129.3 8.6 -3.9
Total Expenditure 836.2 864.7 768.3 786.3 8.8 6.3
EBITDA 221.7 207.9 276.1 182.3 -19.7 21.6
EBITDA (%) 21.0 19.4 26.4 18.8 -548 bps 214 bps YoY contraction was led by higher raw material and employee expenditure.
Interest 14.7 13.8 8.8 13.8 67.0 6.5
Depreciation 97.4 93.6 70.3 93.6 38.5 4.1 Increased YoY mainly due to commissioning of Malaysian facility
Other income 33.9 42.6 47.5 50.8 -28.6 -33.3 Includes | 7 crore of forex gain
EO 0.0 0.0 0.0 0.0 0.0 0.0
PBT 143.5 143.1 244.5 125.7 -41.3 14.2
Tax 36.1 31.5 54.4 42.5 -33.6 -15.1
MI 21.7 21.7 19.5 20.3 11.3 6.9
PAT 91.9 89.9 171.4 68.8 -46.4 33.6 Delta vis-à-vis EBITDA was due to higher Interest, Depreciation and Taxation
Key Metrics
Biopharmaceuticals 368.8 370.5 406.9 349.5 -9.4 5.5 YoY impact was mainly due to persistent pricing pressure and channel
consolidation in the US impacting statins business
Biologics 178.0 162.0 143.4 155.7 24.1 14.3 YoY growth on the back of strong growth in insulins and biosimilar antibodies
portfolio
Branded Formulations 156.1 147.6 123.3 175.9 26.6 -11.3 YoY growth and beat vis-à-vis I-direct estimates mainly due to strong UAE revenue
growth driven by metabolics portfolio and brand of biosimilar Insulin Glargine.
Sales momentum in other branded generic products also boosted revenues during
the quarter
Contract Research 387.7 355.0 332.2 335.2 16.7 15.7 YoY growth and beat vis-à-vis I-direct estimates due to strong performance by
chemicals vertical from the development & manufacturing vertical and traction in
Discovery Services vertical
Licensing income 11.8 30.0 79.0 1.0 -85.1 1,080.0
Source: Company, ICICIdirect.com Research
Change in estimates
(| Crore) Old New % Change Old New % Change
Revenues 4,191.2 4,158.7 -0.8 5,006.4 4,921.5 -1.7
EBITDA 960.3 973.8 1.4 1,284.2 1,273.1 -0.9
EBITDA Margin (%) 22.9 23.4 52 bps 25.7 25.9 17 bps
Net Profit 489.2 501.7 2.6 701.2 711.3 1.4
EPS (|) 8.2 8.4 2.0 11.7 11.9 1.3
FY18E FY19E
Source: Company, ICICIdirect.com Research
Assumptions
Current
Growth (%) FY16 FY17 FY18E FY19E FY18E FY19E
Biopharmaceuticals 1,729.0 2,194.0 2,148.9 2,460.3 2,182.8 2,569.3
Branded Formulations 440.0 548.9 619.6 699.2 598.4 707.7
Contract Research 1,060.0 1,181.7 1,324.1 1,602.1 1,294.6 1,553.5
Licensing income 108.0 144.2 32.5 120.0 68.7 120.0
Earlier
Source: Company, ICICIdirect.com Research; * excludes Licensing income
ICICI Securities Ltd | Retail Equity Research Page 3
Company Analysis
Biocon was established in 1978 by first generation entrepreneur Dr Kiran
Mazumdar-Shaw. Unlike most pharma companies that are chemical
based, Biocon has carved out its niche in the more complex
biotechnology field. Over the decades, Biocon has successfully evolved
into an emerging global biopharma enterprise, serving its partners and
customers in over 75 countries. As a fully integrated biopharma company,
it delivers innovative biopharmaceutical solutions, ranging from discovery
to development & commercialisation. In 2004, it came out with its maiden
IPO.
Four of its biosimilar products (Trastuzumab, Pegfilgrastim, Adalimumab
and Insulin Glargine) have already reached the critical milestone of global
Phase III clinical trials. The company has initiated filings of biosimilars in
the US and EU besides launches in Japan. Biocon entered into a
partnership with Mylan for six biosimilar programs (Trastuzumab,
Pegfilgrastim, Adalimumab, Bevacizumab, Etanercept and Filgrastim) and
three insulin analog programmes (Glargine, Lispro and Aspart).
The company has received approval for its Insulin Glargine from the
Japanese regulator in March 2016. Biocon has developed and
manufactured Insulin Glargine BS Injection Kit (FFP). FFP in Japan has
commercialised it. The company also achieved its first ANDA approval,
Rosuvastatin Calcium in US.
Biocon announced a partnership with Sandoz, a Novartis division and a
global leader in biosimilars, for an exclusive portfolio of next-generation
biosimilars in the area of immunology and oncology. This synergistic
partnership will leverage the capabilities of both partners for an ‘end to
end’ play encompassing development, manufacturing, regulatory
approval and commercialization globally. This collaboration addresses
some of the long term biosimilars opportunities beyond the near term
opportunities being addressed by existing partnership with Mylan.
Exhibit 1: Biosimilars: Insulin pipeline
Molecule Type Status Market Size (US$ billion)
Rh Insulin Recombinant Human Insulin US Development-Preclinical 3.2
Glargine Long Acting Basal Insulin Global Phase III, Japan Aprvd. 6.4
Aspart Rapid Acting Insulin Analog Preclinical/Scale Up 4.5
Lispro Rapid Acting Insulin Analog Preclinical/Scale Up 2.8
Total Market Size 16.9
Source: Company, ICICIdirect.com Research
Exhibit 2: Biosimilars: MAbs & biologics pipeline
Molecule Indication Status Market Size (US$ billion)
Adalimumab Chronic Plaque Psoriasis Global Phase III 16.1
Trastuzumab mBreast Cancer Global Phase III, US,EU U.review 6.9
Pegfilgrastim Chemo-induced Neutropenia Under Review in EU 4.6
Bevacizumab mColorectal Cancer Global Phase III, RoW Phase III 6.9
Filgrastim Chemo-induced Neutropenia Preclinical/Scale Up 0.8
Etanercept Auto-immune Preclinical/Scale Up 8.9
Total Market Size 44.2
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 4
Exhibit 3: Revenues to grow at CAGR of 13.9% in FY17-20E
2485.3
2877.33089.8
3381.0
3921.64158.7
4921.5
5801.9
0.0
1000.0
2000.0
3000.0
4000.0
5000.0
6000.0
7000.0
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
Revenues
(| c
rore
)
Source: Company, ICICIdirect.com Research
Biocon has realigned its segments after the adoption of Ind-As. They are-
1) small molecules, 2) research services (Syngene), 3) branded
formulations and 4) biologics.
Small molecules- The small molecules segment accounts for ~41% of the
turnover (FY17) and comprises APIs like statins, immunosuppressants,
specialty APIs and also includes generic formulations business. This
vertical has been witnessing pricing pressure in some products. The
company is exploring fewer opportunities but with higher profitability in
this segment such as moving into formulations and filing own ANDAs,
505 (b)(2) filings, etc. It has already filed seven or eight ANDAs
cumulatively. These include complex generics and injectables. We expect
small molecules segment to grow at a CAGR 1% CAGR to | 1647 crore in
FY17-20E
Biologics – The biologics segment includes novel biologics and
biosimilars, including Rh-insulin, insulin analogs, monoclonal antibodies
and recombinant proteins. This segment accounts for ~14% of turnover
in FY17E. Biocon is mainly focusing on the following therapies-
diabetology, oncology and immunology. This segment has been
specifically carved out to tap numerous biosimilar opportunities
especially in the next three to five years. Globally, the biosimilar space is
still in a nascent state for want of guidelines by most countries including
the US. The now defunct Pfizer deal was also based on biosimilar
opportunities. Biocon’s biosimilar pipeline currently includes 10 products
in different phases of completion. Out of these 10 products, the four
diabetic products- Rh Insulin, Glargine, Lispro and Aspart were the
subject matter of two deals first with Pfizer and then with Mylan
(excluding Rh Insulin). In Q3, Biocon has secured first ever biosimilar
approval (gTrastuzumab) by an Indian pharma company in the US.
Although Trastuzumab approval does not imply immediate launch of the
product in the US, it endorses the development and manufacturing
capabilities of Biocon in the realm of biosimilars. The company has also
announced second partnership in biosimilar space with Sandoz for global
development of next generation biosimilars. The company has invested
heavily in this space over the last two to three years, especially the
Malaysian facility, which is now functional. The progress, so far, has been
encouraging with launches in emerging markets, Glargine launch in Japan
and filing arrangements in the EU and US. We expect biologics to grow at
a CAGR of ~31% to | 1309 crore in FY17-20E.
ICICI Securities Ltd | Retail Equity Research Page 5
Exhibit 4: Recent Progress on biosimilar front
Date Event
Jan-18 Collaborates with Sandoz for a global partnership to develop, manufacture and commercialize a number of next generation biosimilars
Dec-17 USFDA approval for Ogivri, a biosimilar Trastuzumab co-developed by Biocon and Mylan
Jul-17 Biocon's partner Fujifilm launches insulin Glargine in Japan
Jul-17 USFDA Oncologic Drugs Advisory Committee (ODAC) recommended approval of Biocon-Mylan's proposed biosimilar Trastuzumab in all eligible indications
Jan-17 USFDA accepts Biocon’s biologics licence application for its biosimilar oncology drug Trastuzumab
Aug-16 European Medicines Agency has accepted Biocon-Mylan Proposed Biosimilar Trastuzumab (gHerceptin) for Review
Jul-16 European Medicines Agency has accepted Biocon-Mylan Proposed Biosimilar Pegfilgrastim (gNeulasta) for Review
Jul-16 Biocon's Insulin Glargine Launched in Japan
Jun-16 Biocon and Mylan to present Phase 3 Trastuzumab Biosimilar Data at the American Society of Clinical Oncology (ASCO) Annual Meeting
Mar-16 Biocon's Insulin Glargine Receives Regulatory Approval in Japan
Mar-16 Biocon inks co-development & commercialisation agreement with Lab PiSA for Rh-insulin in US
May-15 Biocon-Mylan's PEG-G-CSF and Adalimumab enter Phase III clinical trials; patient recruitment for one Insulin Glargine Phase III study completed
Source: Company, ICICIdirect.com Research
Exhibit 5: Small molecules & biologics to grow at CAGR of 14% in FY17-20E
1503.7
1732.0 1765.0 1729.0
2194.0 2148.9
2460.3
2956.3
0
500
1000
1500
2000
2500
3000
3500
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
(|
crore)
Small Molecules+Biologics
Source: Company, ICICIdirect.com Research
Exhibit 6: Licensing income
25.0
15.4
43.0
108.0
144.2
32.5
120.0 120.0
0
20
40
60
80
100
120
140
160
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
(|
crore)
Licensing income
Source: Company, ICICIdirect.com Research
Branded formulations - It comprises Indian domestic formulations. Biocon
owns 80+ brands encompassing seven therapeutic segments viz.
diabetology, oncology, nephrology, cardiology, immunotherapy,
comprehensive care and bio-products. However, with ~0.33% market
share (AIOCD MAT September 2017) and 55th rank in the IPM market
(AIOCD), the company is still a marginal player in the Indian context.
Among therapies, diabetology is the largest therapy, which accounts for
9.9% CAGR
10.5% CAGR
ICICI Securities Ltd | Retail Equity Research Page 6
58% of branded formulations. Some of its unique launches are INSUPen
(insulin delivery device), Biomab (novel biologic for oncology) and
Alzumab (novel biologic for psoriasis). The list includes CANMAb
(biosimilar version of oncology product Herceptin). This segment
constitutes ~14% of overall sales (FY17).
Exhibit 7: Branded formulation sales to grow at CAGR of 14% in FY17-20E
347.9
391.4430.0 440.0
548.9
619.6
699.2
804.1
0
100
200
300
400
500
600
700
800
900
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
(|
crore)
Branded Formulations
Source: Company, ICICIdirect.com Research
Research services (Syngene) - Biocon’s research arm Syngene
contributed ~30% to its turnover (FY17). This is the CRO business of
Biocon, which deploys over 3053 scientists (FY17). The company
provides end-to-end discovery and development services for novel
molecular entities (NMEs) across industrial sectors including
pharmaceutical, biotechnology, agrochemicals, consumer health, animal
health, cosmetic and nutrition companies under one roof with a
distinctive economic advantage. It also provides support for biosimilar
and generic molecules development. The company provides variable cost
alternative like full-time equivalent (FTE) and fee-for-service (FFS) to the
traditionally fixed cost, in-house, resource intensive business model of
R&D focused organisations. Currently, the company has 293 clients
ranging from large multinational corporations to start-ups, including eight
of the top 10 global pharmaceutical companies. The company has
developed long-term relationships and has multi-year contracts with its
clients, including four long-duration multidisciplinary partnerships with
Bristol-Myers Squibb (BMS), Abbott Laboratories (Singapore), Baxter
International and Amgen. This segment has consistently been growing at
double digit and has recently been the major growth driver for the
company as the biopharma segment is slowing down. We expect
revenues to grow at a CAGR of ~17% to | 1875 crore in FY17-20E.
Research services revenues (FY17)
Dedicated
R&D
services
(34%)
Discovery
services
(26%)
Development
& Mfg
services
(40%)
12.1% CAGR
13.6% CAGR
ICICI Securities Ltd | Retail Equity Research Page 7
Exhibit 9: Trends in overall R&D cost (Ex Capitalise)
167.8
130.6
168.8
265.5 272.4
219.7
262.4
310.4
6.8
4.5
5.5
7.9
6.9
5.3 5.4
5.3
0
100
200
300
400
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
(|
crore)
3.0
4.5
6.0
7.5
9.0
(%
)
R & D cost R & D cost (% revenues)
Source: Company, ICICIdirect.com Research
Exhibit 10: Trends in EBITDA margins
543.0
687.1 695.8635.8
851.2
973.8
1273.1
1557.8
23.9
22.5
18.8
21.7
21.8
23.425.9
26.8
0
400
800
1200
1600
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
(|
crore)
18
20
22
24
26
28
(%
)
EBITDA EBITDA Margins (%)
Source: Company, ICICIdirect.com Research
Exhibit 8: Contract research to grow at CAGR of 17% in FY17-20E
558.0
714.7
822.0
1060.0
1181.7
1324.1
1602.1
1874.5
0
200
400
600
800
1000
1200
1400
1600
1800
2000
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
(| crore)
Contract Research
Source: Company, ICICIdirect.com Research
20.6% CAGR
16.6% CAGR
ICICI Securities Ltd | Retail Equity Research Page 8
Exhibit 11: Net profit to grow at CAGR of 16% in FY17-20E
508.9
413.8
497.4
550.4
612.1
501.7
711.3
1015.5
14.4
20.5
16.1 16.3
15.6
12.1
14.5
17.5
0
200
400
600
800
1000
1200
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
(|
crore
)
4
6
8
10
12
14
16
18
20
22
(%
)
Net Profit Net Profit Margins (%)
Source: Company, ICICIdirect.com Research
Exhibit 12: Return ratios likely to improve on the back of better profitability…
11.9
10.4
6.5
9.610.2
13.9
11.7
17.112.6
13.7
12.5
7.8
10.5
9.6
12.3
15.4
6
10
14
18
22
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
(%
)
4
6
8
10
12
14
16
18
(%
)
RoCE (RHS) RoNW (LHS)
Source: Company, ICICIdirect.com Research
SWOT Analysis
Strengths – It is an early entrant in a more lucrative biotech space with
proven track records. The space has high entry barriers due to complexity
of the molecules and tougher trials requirement. Four dedicated centres
catering to the top global players.
Weakness - Its largest segment i.e. small molecules has been witnessing
constant pricing pressure and capacity constraints. Other emerging
segments such as biosimilars will take some time to scale up.
Opportunities – A huge opportunity beckons for biosimilars as globally
seven out of the top 10 drug brands are biologics. Some of them will lose
patent exclusivity in the next five to seven years. The price erosion in
biosimilars is much less than that of chemical compound based drugs.
Threats- (i) Backtracking by Mylan may increase the R&D cost sharply, (ii)
pricing pressure in branded formulations, (iii) increased scrutiny by
USFDA and other regulators worldwide.
ICICI Securities Ltd | Retail Equity Research Page 9
Exhibit 13: Trends in quarterly performance
(| Crore) Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 YoY (%) QoQ(%)
Revenues 769.1 837.3 813.9 796.2 807.1 945.0 992.0 954.1 1044.4 931.1 933.7 968.6 1057.9 1.3 9.2
Raw Material Cost 317.6 337.5 293.9 326.3 303.1 322.6 400.2 353.8 374.7 348.4 365.8 377.6 423.8 13.1 12.2
% to revenues 41.3 40.3 36.1 41.0 37.6 34.1 40.3 37.1 35.9 37.4 39.2 39.0 40.1
Gross Profit 451.5 499.8 520.0 469.9 504.0 622.4 591.8 600.3 669.7 582.7 567.9 591.0 634.1 -5.3 7.3
Gross Profit Margin (%) 58.7 59.7 63.9 59.0 62.4 65.9 59.7 62.9 64.1 62.6 60.8 61.0 59.9 -418 bps -108 bps
Employee cost 136.0 136.6 148.3 143.1 152.2 166.5 178.5 180.4 194.2 193.9 213.3 225.5 235.3 21.2 4.3
% to revenues 17.7 16.3 18.2 18.0 18.9 17.6 18.0 18.9 18.6 20.8 22.8 23.3 22.2 365 bps -104 bps
R & D 46.9 56.0 50.0 57.4 67.9 100.0 51.4 65.0 85.0 65.0 58.2 53.9 52.9
% to revenues 6.1 6.7 6.1 7.2 8.4 10.6 5.2 6.8 8.1 7.0 6.2 5.6 5.0 -314 bps -56 bps
Other Expenditure 108.7 122.4 113.4 100.3 99.1 159.0 98.8 114.9 114.4 136.3 104.3 129.3 124.2 8.6 -3.9
% to revenues 14.1 14.6 13.9 12.6 12.3 16.8 10.0 12.0 11.0 14.6 11.2 13.3 11.7 79 bps -161 bps
Total Expenditure 609.2 652.5 605.6 627.1 622.3 748.1 728.9 714.1 768.3 743.6 741.6 786.3 836.2 8.8 6.3
% to revenues 79.2 77.9 74.4 78.8 77.1 79.2 73.5 74.8 73.6 79.9 79.4 81.2 79.0
EBIDTA 160.0 184.9 208.3 169.1 184.8 196.9 263.1 240.0 276.1 187.5 192.1 182.3 221.7 -19.7 21.6
EBITDA Margin (%) 20.8 22.1 25.6 21.2 22.9 20.8 26.5 25.2 26.4 20.1 20.6 18.8 21.0 -548 bps 214 bps
Depreciation 56.3 58.5 59.0 61.0 63.9 64.8 66.1 68.3 70.3 72.5 98.8 93.6 97.4 38.5 4.1
Interest 4.8 0.0 4.4 2.9 1.5 16.6 5.7 6.5 8.8 5.0 16.1 13.8 14.7 67.0 6.5
OI 9.8 16.8 19.9 22.7 21.6 21.4 40.9 38.4 47.5 43.2 54.0 50.8 33.9 -28.6 -33.3
PBT 108.6 143.2 164.8 127.9 141.0 136.9 232.2 203.6 244.5 153.2 131.2 125.7 143.5 -41.3 14.2
Tax 11.2 21.9 37.6 28.2 21.8 59.1 55.2 41.7 54.4 10.3 37.6 42.5 36.1 -33.6 -15.1
Tax Rate (%) 10.3 15.3 22.8 22.1 15.5 43.2 23.8 20.5 22.2 6.7 28.7 33.8 25.2
PAT 97.5 121.3 127.2 99.7 119.2 77.8 177.0 161.9 190.1 142.9 93.6 83.2 107.4 -43.5 29.1
PAT Margin (%) 12.7 14.5 15.6 12.5 14.8 8.2 17.8 17.0 18.2 15.3 10.0 8.6 10.2
Exceptional Items (EI) 0.0 -95.2 0.0 107.8 0.0 -268.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net Profit before MI 97.5 216.4 127.2 -8.1 119.2 346.2 177.0 161.9 190.1 142.9 93.6 83.2 107.4 -43.5 29.1
Add/(less) MI 6.6 15.3 7.1 12.5 17.7 21.1 15.8 19.8 19.5 20.9 16.4 20.3 21.7
Net Profit after MI 90.9 201.2 120.1 -20.6 101.5 325.1 161.2 142.1 170.6 122.0 77.2 62.9 85.7 -49.8 36.2
Net Profit (excl.EI) 90.9 106.0 120.1 87.2 101.5 56.7 161.2 142.1 170.6 122.0 77.2 62.9 85.7 -49.8 36.2
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 10
Conference call Highlights
The company has entered into a collaborative agreement with
Sandoz for a global partnership to develop, manufacture and
commercialise a number of next generation biosimilars to
enhance patient access to complex bio-therapeutics in the area of
immunology and oncology
It has also received approval from ANVISA, the Brazilian
regulatory agency, for biosimilar Trastuzumab for the first time in
Brazil. Malaysia facility has also received GMP approval from
ANVISA for both Drug Substance and Drug Product
The company received Insulin Glargine approval in Russia
The European Medicines Agency (EMA) has accepted for review
of its partner Mylan's resubmitted Marketing Authorization
Applications (MAA) for proposed biosimilars of Trastuzumab and
Pegfilgrastim.
The company launched Krabeva, a biosimilar Bevacizumab in
India, for the treatment of patients with metastatic colorectal
cancer and other types of lung, kidney, cervical, ovarian and brain
cancers
Gross R&D expenses in Q3 were at | 94 crore for this quarter,
while net R&D expenses reflected in the P&L were | 53 crore. The
company has guided for | 400 crore of gross R&D for FY18 and
| 450 -| 500 crore for FY19
The company has launched generic Rosuvastatin Calcium tablets
(statin) in the US in Q2 and garnered ~10% market share.
Biocon’s partner has also launched this product on Day-1, in
Western Europe
Biologic’s sales witnessed production disruption during the
quarter due to facility modifications to comply with EMA, USFDA
regulations. The plant has resumed commercial production. The
company expects normalised growth from Q4. It expects robust
growth in FY19, largely driven by emerging market approvals
The company has commenced a pivotal Phase II/III clinical study
with Insulin Tregopil, a novel, fast-acting oral insulin candidate, in
people with Type 2 diabetes in India, post approval from the
Drugs Controller General of India (DCGI).
Biocon’s partner Mylan has submitted Complete Response Letter
(CRL) to USFDA for biosimilar Pegfilgrastim. The management
expects to get USFDA response in FY19
The management expects EU approval for Trastuzumab and
Pegfilgrastim in H2FY19
The company has guided for ~| 100 crore of maintenance capex.
Biocon is spending US$150-175 million in two years for
construction of an anti-body plant. This facility would be
commissioned in two years
The annual expense of the Malaysia plant is ~US$48 million
(~US$12 million quarterly) spread out in interest, depreciation
and other expenditure
ICICI Securities Ltd | Retail Equity Research Page 11
Valuation
In Q3, the company secured its first biosimilar approval (Trastuzumab) in
the US, also the first by an Indian pharma company. Although
Trastuzumab approval does not imply immediate launch of the product in
the US, it endorses the development and manufacturing capabilities of
Biocon in the realm of biosimilars. The company has also announced its
second partnership in the biosimilar space with Sandoz for global
development of next generation biosimilars, which has again vindicated
its capability in the biologics (biosimilars). Progress on the biosimilars
regulatory front in the developed markets and launches in the developed
as well as emerging markets is likely to maintain investors optimism for
the company. We continue to value the stock on an SOTP basis.
Accordingly, we arrive at our target price of | 680 per share.
Exhibit 14: Contract research to grow at CAGR of 17% in FY17-20E
Particulers FY19E EPS (| cr) Multiple (x) Per share (| )
Biocon (ex Syngene) 9.6 30.0 288.1
Syngene
Targeted Market Cap 13600
Biocon's Holding 74.5%
Holding Company Discount 20.0%
Syngene valuation 8107
Per share valuation 135
NPV (BIosimilars) 258
SOTP valuation 680
Source: ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 12
Exhibit 15: One year forward PE
0.0
100.0
200.0
300.0
400.0
7/2
8/2
01
1
1/2
8/2
01
2
7/2
8/2
01
2
1/2
8/2
01
3
7/2
8/2
01
3
1/2
8/2
01
4
7/2
8/2
01
4
1/2
8/2
01
5
7/2
8/2
01
5
1/2
8/2
01
6
7/2
8/2
01
6
1/2
8/2
01
7
7/2
8/2
01
7
(|)
Series1 32.2x 26.0x 15.6x 11.4x 7.3x
[
Exhibit 16: One year forward PE of company vs. CNX Pharma Index
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
7/28/201
1
1/28/201
2
7/28/201
2
1/28/201
3
7/28/201
3
1/28/201
4
7/28/201
4
1/28/201
5
7/28/201
5
1/28/201
6
7/28/201
6
1/28/201
7
7/28/201
7
(x)
Biocon CNX Pharma
56% Premium
Source: Company, ICICIdirect.com Research
Exhibit 17: Valuation
Revenues Growth EPS Growth P/E EV/EBITDA RoNW RoCE
(| crore) (%) (|) (%) (x) (X) (%) (%)
FY17 3922 16.0 8.5 61.6 59.1 42.3 10.5 9.6
FY18E 4159 6.0 8.4 -1.4 72.1 36.9 9.6 10.2
FY19E 4921 18.3 11.9 41.8 50.9 28.1 12.3 13.9
FY20E 5802 17.9 16.9 42.8 35.6 22.7 15.4 17.1
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 13
Recommendation history vs. Consensus
0.0
10.0
20.0
30.0
40.0
50.0
60.0
0
100
200
300
400
500
600
700
Jan-18Nov-17Sep-17Jun-17Apr-17Jan-17Nov-16Aug-16Jun-16Apr-16Jan-16Nov-15Aug-15Jun-15Apr-15Jan-15
(%
)(|)
Price Idirect target Consensus Target Mean % Consensus with BUY
Source: Reuters, Company, ICICIdirect.com Research
Key events
Date Event
Nov-12 Enters into an option agreement with Bristol-Myers Squibb (BMS) for Biocon's IN-105 (oral insulin product candidate)
Feb-13 Out-licenses three insulin analogue products to Mylan. Mylan will have the rights to develop and market Biocon's Glargine, Lispro and Aspart.
Nov-13 Receives marketing approval from Drugs Controller General of India to launch its biosimilar Trastuzumab (anti-cancer) in Indian market.
Jan-14 Biocon launches its biosimilar CanMab in Indian market
Sep-14 Biocon Research buys back the 7.69% stake held by GE Equity International Mauritius valuing Syngene at | 2800 crore.
Jan-15 Silver Leaf Oak acquires 10% stake in Syngene International, Biocon's Research Services Subsidiary at a valuation of | 3800 crore
Jul-15 Syngene IPO starts from July 27, 2015 at a price range of | 240-250
Oct-15 Acquired API unit of Acacia Life Sciences Private Limited at Vizag
Jun-16 Biocon and Mylan to Present Phase 3 Trastuzumab Biosimilar Data at the American Society of Clinical Oncology (ASCO) Annual Meeting
Jul-16 Biocon's Insulin Glargine launched in Japan
Jul-16 European Medicines Agency accepts Biocon-Mylan proposed biosimilar Pegfilgrastim (gNeulasta) for review
Aug-16 European Medicines Agency accepts Biocon-Mylan proposed biosimilar Trastuzumab (gHerceptin) for review
Jan-17 USFDA accepts Biocon’s biologics licence application for its biosimilar oncology drug Trastuzumab
Jul-17 USFDA Oncologic Drugs Advisory Committee (ODAC) recommends approval of Biocon/Mylan’s proposed biosimilar Trastuzumab, a biologically similar version of
Roche's breast-cancer drug Herceptin
Dec-17 USFDA approval for Ogivri, a biosimilar Trastuzumab co-developed by Biocon and Mylan
Jan-18 Collaborates with Sandoz for a global partnership to develop, manufacture and commercialize a number of next generation biosimilars
Source: Company, ICICIdirect.com Research
Top 10 Shareholders Shareholding Pattern
Rank Investor Name Latest Filing Date % O/S Position Position Change
1 Shaw (Kiran Mazumdar) 31-Dec-17 39.6 237.9m 0.0
2 Glentec International 31-Dec-17 19.8 118.6m 0.0
3 OppenheimerFunds, Inc. 31-Dec-17 3.7 22.2m 1.7
4 Biocon India Ltd Employee Welfare Trust 3-Jan-18 1.5 9.2m -0.1
5 Franklin Templeton Asset Management (India) Pvt. Ltd. 30-Sep-17 1.5 8.9m 2.4
6 Jupiter Asset Management Ltd. 31-Dec-17 1.4 8.4m -2.5
7 Templeton Asset Management Ltd. 31-Dec-17 1.1 6.7m -0.6
8 Chandavarkar (Arun Suresh) 31-Dec-17 1.1 6.6m 0.0
9 The Vanguard Group, Inc. 31-Dec-17 0.8 4.6m 0.0
10 Dimensional Fund Advisors, L.P. 31-Dec-17 0.8 4.5m 0.0
(in %) Dec-16 Mar-17 Jun-17 Sep-17 Dec-17
Promoter 60.7 60.7 60.7 60.7 60.7
Public 39.3 39.3 39.3 39.3 39.3
Source: Reuters, ICICIdirect.com Research
Recent Activity
Investor Name Value ($ mn) Shares Investor Name Value ($ mn) Shares
Franklin Templeton Asset Management (India) Pvt. Ltd. 12.43 2.44 Jupiter Asset Management Ltd. -20.95 -2.49
OppenheimerFunds, Inc. 14.24 1.69 ICICI Prudential Asset Management Co. Ltd. -16.76 -1.99
Bellevue Asset Management AG 6.17 0.92 Templeton Asset Management Ltd. -5.26 -0.62
Aberdeen Asset Management (Asia) Ltd. 3.08 0.46 India Infoline Asset Management Company Limited -1.58 -0.30
Canara Robeco Asset Management Company Ltd. 1.68 0.20 Kotak Mahindra Asset Management Company Ltd. -1.83 -0.22
BUYS SELLS
Source: Reuters, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 14
.
Financial summary
Profit and loss statement | Crore
Year-end March FY17 FY18E FY19E FY20E
Total Operating Income 3921.6 4158.7 4921.5 5801.9
Growth (%) 16.0 6.0 18.3 17.9
Raw Material Expenses 1477.1 1587.3 1825.9 2152.5
Employee Expenses 747.0 894.3 969.5 1084.9
R&D Expenditure 272.4 219.7 262.4 310.4
Other Expenditures 573.9 483.6 590.6 696.2
Total Operating Expenditure 3070.4 3184.9 3648.4 4244.1
Operating Profit (EBITDA) 851.2 973.8 1273.1 1557.8
Growth (%) 33.9 14.4 30.7 22.4
Depreciation 277.2 387.2 420.7 441.7
Interest 26.0 59.3 41.9 24.5
Other Income 157.1 180.2 195.3 230.2
PBT before Exceptional Items 705.1 707.5 1005.8 1321.8
Less: Exceptional Items -128.3 0.0 0.0 0.0
Total Tax 161.6 150.8 221.3 290.8
PAT before MI 671.8 556.7 784.5 1031.0
Minority Interest 76.0 77.4 98.1 114.7
Adjusted PAT 508.7 501.7 711.3 1015.5
Growth (%) 61.6 -1.4 41.8 42.8
EPS (Adjusted) 8.5 8.4 11.9 16.9
Source: Company, ICICIdirect.com Research
Cash flow statement | Crore
Year-end March FY17 FY18E FY19E FY20E
Profit/(Loss) after taxation 612.1 501.7 711.3 1015.5
Add: Depreciation & Amortization 277.2 387.2 420.7 441.7
Net Increase in Current Assets -380.8 -13.4 -283.5 -329.4
Net Increase in Current Liabilities 310.4 27.8 174.4 195.7
Other Operating Activities 26.0 59.3 41.9 24.5
CF from operating activities 844.9 962.6 1064.8 1347.9
(Increase)/Decrease in Investments -394.0 0.0 0.0 0.0
(Purchase)/Sale of Fixed Assets -632.2 -700.0 -700.0 -700.0
Increase/ (Decrease) in Minority Interest 110.3 -8.8 7.2 0.0
Other Investing Activities -65.2 0.3 1.3 -2.7
CF from investing activities -981.1 -708.5 -691.5 -702.7
Proceeds from issues of Equity Shares 0.0 0.0 0.0 0.0
Inc/(dec) in loan funds -261.9 -500.0 -500.0 -500.0
(Payment) of Dividend and Dividend Tax -70.2 -125.4 -149.4 -213.2
Interest Paid -26.0 -59.3 -41.9 -24.5
Other Financing Activities 0.0 0.0 0.0 0.0
CF from financing activities -358.1 -684.7 -691.3 -737.8
Net Cash flow -494.3 -430.6 -317.9 -92.5
Opening Cash 1538.6 1044.3 613.7 295.7
Closing Cash 1044.3 613.7 295.7 203.2
Free Cash Flow 212.7 262.6 364.8 647.9
Source: Company, ICICIdirect.com Research
Balance sheet | Crore
Year-end March FY17 FY18E FY19E FY20E
Liabilities
Equity Capital 100.0 300.0 300.0 300.0
Reserve and Surplus 4737.7 4914.0 5475.9 6278.1
Total Shareholders funds 4837.7 5214.0 5775.9 6578.1
Total Debt 2205.4 1705.4 1205.4 705.4
Deferred Tax Liability (Net) -190.6 -186.2 -189.8 -189.8
Minority Interest 376.1 367.3 374.6 374.6
Other NCL & LT Provisions 393.9 384.7 392.3 392.3
Source of Funds 7622.5 7485.3 7558.4 7860.6
Assets
Gross Block - Fixed Assets 5409.7 5709.7 6009.7 6309.7
Accumulated Depreciation 1811.0 2198.2 2618.9 3060.6
Net Block 3598.7 3511.5 3390.8 3249.1
Capital WIP 839.2 1239.2 1639.2 2039.2
Total Fixed Assets 4437.9 4750.7 5030.0 5288.3
Goodwill on Consolidation 26.4 26.4 26.4 26.4
Investments 1382.7 1382.7 1382.7 1382.7
Inventory 635.3 644.1 749.0 882.9
Debtors 883.2 895.4 1070.0 1261.4
Cash 1044.3 613.7 295.7 203.2
Other Current Assets 419.9 412.3 416.4 420.4
Total Current Assets 2982.7 2565.5 2531.0 2767.9
Creditors 739.7 749.9 887.5 1046.2
Provisions 46.8 77.0 107.1 137.3
Other Current Liabilities 698.2 685.6 692.3 699.1
Total Current Liabilities 1484.7 1512.5 1686.9 1882.6
Net Current Assets 1498.0 1053.0 844.1 885.3
Other Non Current assets 277.5 272.5 275.2 277.9
Application of Funds 7622.5 7485.3 7558.4 7860.6
Source: Company, ICICIdirect.com Research
Key ratios
Year-end March FY17 FY18E FY19E FY20E
Per share data (|)
Reported EPS 10.2 8.4 11.9 16.9
BV per share 80.6 86.9 96.3 109.6
Dividend per share 1.2 2.1 2.5 3.6
Cash Per Share 17.4 10.2 4.9 3.4
Operating Ratios (%)
Gross Margin 62.3 61.8 62.9 62.9
EBITDA margin 21.7 23.4 25.9 26.8
EBIT Margin 14.6 14.1 17.3 19.2
PAT Margin 13.0 12.1 14.5 17.5
Inventory days 59.1 56.5 55.5 55.5
Debtor days 82.2 78.6 79.4 79.4
Creditor days 68.8 65.8 65.8 65.8
Asset Turnover 0.5 0.6 0.7 0.7
EBITDA Conversion Ration 99.3 98.9 83.6 86.5
Return Ratios (%)
RoE 10.5 9.6 12.3 15.4
RoCE 9.6 10.2 13.9 17.1
RoIC 13.1 13.7 19.9 26.1
Valuation Ratios (x)
P/E 59.1 72.1 50.9 35.6
EV / EBITDA 42.3 36.9 28.1 22.7
EV / Net Sales 9.2 8.6 7.3 6.1
Market Cap / Sales 9.2 8.7 7.4 6.2
Price to Book Value 7.5 6.9 6.3 5.5
Solvency Ratios
Debt / EBITDA 2.6 1.8 0.9 0.5
Debt / Equity 0.5 0.3 0.2 0.1
Current Ratio 1.3 1.3 1.3 1.4
Quick Ratio 0.9 0.9 0.9 0.9
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 15
ICICIdirect.com coverage universe (Healthcare)
Company I-Direct CMP TP Rating M Cap
Code (|) (|) (| Cr) FY17 FY18E FY19E FY20E FY17 FY18E FY19E FY20E FY17 FY18E FY19E FY20E FY17 FY18E FY19E FY20E
Ajanta Pharma AJAPHA 1472 1,300 Hold 12953.1 57.4 53.2 64.2 75.3 25.7 27.7 22.9 19.5 42.3 32.8 31.0 29.9 33.7 25.3 24.9 23.9
Alembic Pharma ALEMPHA 556 530 Hold 10473.9 21.2 21.0 24.8 28.9 26.2 26.4 22.4 19.2 25.3 19.3 20.4 21.1 21.0 18.0 18.2 18.2
Apollo Hospitals APOHOS 1132 1,060 Hold 15749.0 15.9 13.4 24.2 34.4 71.3 84.2 46.7 32.9 6.1 7.5 9.9 12.1 6.0 4.9 8.2 10.7
Aurobindo Pharma AURPHA 644 810 Hold 37710.3 38.8 43.1 41.2 44.8 16.6 14.9 15.6 14.4 24.4 22.9 19.8 19.3 24.2 21.5 17.2 16.0
Biocon BIOCON 603 680 Buy 36180.0 8.5 8.4 11.9 16.9 71.1 72.1 50.9 35.6 9.6 10.2 13.9 17.1 10.5 9.6 12.3 15.4
Cadila Healthcare CADHEA 422 470 Hold 43237.8 14.5 16.4 21.6 25.7 29.1 25.8 19.6 16.4 13.1 17.4 19.5 20.8 21.4 20.4 22.4 22.2
Cipla CIPLA 623 650 Hold 50135.1 12.5 22.1 27.2 32.6 49.7 28.2 22.9 19.1 7.7 13.2 14.6 16.1 8.0 12.7 13.9 14.7
Divi's Lab DIVLAB 1095 1,090 Hold 29055.5 39.9 35.4 43.2 49.5 27.4 31.0 25.3 22.1 25.3 20.4 22.1 22.1 19.8 15.7 16.9 16.8
Dr Reddy's Labs DRREDD 2402 2,520 Hold 39832.9 78.0 61.4 93.4 138.5 30.8 39.1 25.7 17.3 7.3 7.0 9.4 11.9 10.5 7.8 10.7 14.0
Glenmark Pharma GLEPHA 631 670 Hold 17799.2 42.2 36.8 36.9 42.2 14.9 17.2 17.1 14.9 19.5 16.7 16.0 16.9 26.5 19.0 16.1 15.7
Indoco Remedies INDREM 293 250 Hold 2701.8 8.4 4.8 12.3 15.1 35.1 61.0 23.9 19.5 8.7 5.7 11.2 13.3 11.8 6.5 14.6 15.7
Ipca Laboratories IPCLAB 574 560 Hold 7237.2 15.4 18.3 33.2 37.5 37.2 31.4 17.3 15.3 8.7 8.9 15.2 15.9 7.9 8.7 14.0 14.0
Jubilant Life JUBLIF 920 1,090 Buy 14653.9 36.1 46.9 68.0 85.3 25.5 19.6 13.5 10.8 13.8 14.7 18.4 20.4 16.8 18.1 21.0 21.0
Lupin LUPIN 946 890 Hold 42742.0 56.7 34.9 38.5 47.5 16.7 27.1 24.6 19.9 16.6 10.9 12.0 14.5 19.0 10.6 10.7 11.9
Narayana Hrudalaya NARHRU 288 360 Buy 5885.6 4.1 4.3 6.7 10.0 69.7 66.2 43.2 28.9 12.5 11.9 14.4 18.7 8.8 8.5 11.5 14.6
Natco Pharma NATPHA 992 1,190 Buy 18304.6 27.9 30.4 52.9 38.7 35.6 32.7 18.7 25.7 33.6 31.5 43.5 27.5 29.5 26.8 34.8 21.3
Sun Pharma SUNPHA 583 485 Hold 139900.2 29.0 14.7 18.2 22.2 20.1 39.7 32.0 26.2 20.3 10.7 12.2 13.5 19.0 9.1 10.3 11.4
Syngene Int. SYNINT 615 680 Buy 12561.0 14.4 13.6 19.0 22.7 42.8 42.8 32.3 27.0 16.8 16.2 20.3 21.7 20.3 16.4 18.8 18.5
Torrent Pharma TORPHA 1384 1,371 Hold 23419.3 55.2 47.8 66.8 79.9 25.1 29.0 20.7 17.3 18.9 19.0 21.0 22.6 21.5 16.3 19.5 19.8
RoE (%)EPS (|) PE(x) RoCE (%)
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 16
RATING RATIONALE
ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns
ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;
Pankaj Pandey Head – Research [email protected]
ICICIdirect.com Research Desk,
ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
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Mumbai – 400 093
ICICI Securities Ltd | Retail Equity Research Page 17
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We /I, Error! Reference source not found. CA-INTER, Mitesh Shah MS (Finance) Harshal Mehta MTech (Biotechnology) Research Analysts, authors and the names subscribed to this report, hereby certify
that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or
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It is confirmed that Error! Reference source not found. CA-INTER, Mitesh Shah MS (Finance) Harshal Mehta MTech (Biotechnology) Research Analysts of this report have not received any compensation
from the companies mentioned in the report in the preceding twelve months.
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It is confirmed that Error! Reference source not found. CA-INTER, Mitesh Shah MS (Finance) Harshal Mehta MTech (Biotechnology) Research Analysts do not serve as an officer, director or employee of the
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ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment
in the past twelve months.
ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in
respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction.
ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned
in the report in the past twelve months.
ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its analysts did not receive any compensation
or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts have any
material conflict of interest at the time of publication of this report.
It is confirmed that Error! Reference source not found. CA-INTER Mitesh Shah MS (Finance), Harshal Mehta MTech (Biotechnology) Research Analysts of this report have not received any compensation
from the companies mentioned in the report in the preceding twelve months.
Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.