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BIOCON: Future Share Dilution Risk Will Likely Pressure Returns

Rising Regulatory Scrutiny And Supply Risks Will Hamper Biosimilars

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BIOCON
AnalystLowTarget
Not Invested
Published 30 Jun 2025

Update shared on 12 Dec 2025

Fair value Increased 4.51%
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AnalystLowTarget's Fair Value
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1Y
18.6%
7D
3.2%

Analysts have raised their price target on Biocon from ₹277.50 to ₹290.00, reflecting higher anticipated revenue growth, improved profit margins, and a modestly re-rated future P E multiple despite a slightly higher discount rate.

What's in the News

  • Biocon is exploring strategic options for its biosimilars arm Biocon Biologics Limited, including a potential merger with the parent company in place of an IPO, with Morgan Stanley advising on value creation alternatives (Key Developments).
  • The board has approved an increase in authorised share capital from INR 7,000 crore to INR 9,000 crore, enabling the issue of additional equity shares subject to shareholder and regulatory approvals (Key Developments).
  • Biocon plans to raise funds via commercial paper and/or equity or other eligible securities through various permissible modes such as QIP, rights issue, preferential issue, or FPO, in one or more tranches (Key Developments).
  • Biocon Biologics' aflibercept biosimilar Yesafili is now publicly funded on the Ontario Drug Benefit Formulary for treating multiple retinal diseases, improving patient access in Canada (Key Developments).
  • Biocon and Equillium have mutually agreed to terminate their collaboration and license agreements related to the monoclonal antibody itolizumab after Equillium decided to halt its development (Key Developments).

Valuation Changes

  • The fair value estimate has risen slightly from ₹277.50 to ₹290.00, indicating a modest uplift in the intrinsic value assessment.
  • The discount rate has inched up marginally from 13.45% to 13.71%, reflecting a slightly higher perceived risk or cost of capital.
  • Revenue growth has increased slightly from 13.18% to 13.78%, signalling a modestly stronger top line outlook.
  • The net profit margin has improved meaningfully from 6.35% to 7.15%, pointing to better expected profitability.
  • The future P/E multiple has risen moderately from 35.2x to 38.5x, implying a somewhat higher valuation being ascribed to projected earnings.

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Disclaimer

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