Summary
Biocon Limited - Q3 FY26 Earnings Call Summary Thursday, February 13, 2026 9:00 AM IST
Event Participants
Executives 11 Abhijit Zutshi (CCO, Biocon Ltd), Anuj Goel (CDO, Biocon Biologics), Deepak Jain (CFO, Syngene), Dr. Kiran Mazumdar-Shaw (Executive Chairperson), Kedar Upadhye (CFO, Biocon Biologics), Matthew Erick (CCO Advanced Markets, Biocon Biologics), Prashant Nair (Head IR), Rhonda Duffy (COO, Biocon Biologics), Shreehas Tambe (CEO & MD, Biocon Biologics), Siddharth Mittal (CEO & MD, Biocon Ltd), Susheel Umesh (CCO Emerging Markets, Biocon Biologics)
Analysts 11 Abdulkader Puranwala, Damyanti Kerai, Harshit Dhoot, Neha Manpuria, Sachin Jain, Shyam Srinivasan, Sidharth Negandhi, Surya Patra, Tushar Manudhane, Vipulkumar Shah, Vishal Manchanda
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Operating Revenue | ₹4,173 crores | +9% YoY; Growth led by Generics (+24%) and Biosimilars (+9%) offsetting CRDMO decline. |
| Biosimilars Revenue | ₹2,497 crores | +9% YoY; Driven by North American volume and market share gains in oncology. |
| Generics Revenue | ₹851 crores | +24% YoY; Significant contribution from generic Liraglutide launches in the EU. |
| CRDMO (Syngene) Revenue | ₹917 crores | -3% YoY; Impacted by transient challenges with a specific customer. |
| Core EBITDA | ₹1,221 crores | +21% YoY; Core margin improved to 29% due to favorable mix and operating leverage. |
| EBITDA | ₹951 crores | +21% YoY; 22% margin; reflects improved geographic prioritization in Biosimilars. |
| R&D Investment | ₹249 crores | 8% of revenue (ex-Syngene); Focused on GLP-1 peptides and oncology biosimilars. |
| Profit Before Tax (ex-exceptional) | ₹226 crores | +64% YoY; Significant growth driven by reduced interest costs and better margins. |
| Net Debt | ~$1.1 - $1.2 billion | Retired all structured debt (Goldman, Kotak, Edelweiss); Net debt/EBITDA now below 2.5x. |
Geographic & Segment Commentary
- Biosimilars (North America): Delivered strong performance with oncology assets (Ogivri, Fulphila) maintaining ~25% market share. Yesintek (Ustekinumab) gained double-digit market share with over 70% commercial coverage. Launched affordable insulin glargine in California via Civica collaboration.
- Biosimilars (Europe & Emerging Markets): Maintained stable market shares in EU with strong tender wins for Abevmy and Ogivri. Launched Yesafili in Turkey, capturing 20% market share. Achieved MHRA and EMA regulatory milestones for new delivery formats (prefilled syringe and auto-injector).
- Generics (Global): Strong growth driven by generic Liraglutide launches in the Netherlands and other EU markets. Signed an out-licensing deal with Ajanta Pharma for Semaglutide in 26 emerging market countries. Operationalized Phase II expansion at the Cranbury, New Jersey facility.
Company-Specific & Strategic Commentary
- Corporate Integration: The planned merger of Biocon Biologics into Biocon Limited aims to simplify the corporate structure, unify governance, and consolidate cash flows into a single listed entity.
- GLP-1 Portfolio Strategy: Biocon is positioning itself at the intersection of interchangeable insulins and generic GLP-1 peptides (Liraglutide and Semaglutide), leveraging its vertical integration and drug-device capabilities.
- Balance Sheet De-leveraging: Cumulative fundraises of ~$1 billion through QIPs enabled the full retirement of high-cost structured debt, resulting in expected annualized interest savings of ~₹300 crores from FY27.
- Asset Acquisition: Secured full and exclusive global rights for Hulio (Adalimumab) from Fujifilm Kyowa Kirin Biologics to assume end-to-end manufacturing and commercialization responsibility.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Biosimilar Margins | Mid-20% range | Targeted for full-year FY26; management expects Q3’s 28% to normalize as geographic mix shifts. |
| Interest Savings | ~₹300 crores savings | Expected annualized savings starting FY27 following full retirement of structured debt. |
| Capacity Expansion | 2x Insulin Capacity | Insulin drug product capacity doubling expected to come online in FY27. |
| Capex | <$225 million per annum | Moderating from previous levels of $275M+; shifting toward maintenance capex as major projects conclude. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory Approval Delays | Management noted Health Canada’s lack of clarity on GLP-1 generic approvals, which has delayed entry into the Canadian market despite multiple filings. |
| Customer Concentration (CRDMO) | Syngene’s revenue was negatively impacted by challenges faced by a single customer, though management views this as a transient issue. |
| Supply Chain/Manufacturing Upgrades | Planned facility upgrades moderated growth in Q3; while necessary for scale, future operational downtime could impact short-term volumes. |
Q&A Highlights
Biosimilar Performance Drivers
- Question: What drove the sequential EBITDA margin expansion despite lower revenue? (Harshit Dhoot)
- Answer: Biocon prioritized high-margin markets (North America share rose to ~47% of biosimilar mix) and benefited from operating leverage as major infrastructure costs are now fixed (Kedar Upadhye).
Hulio (Adalimumab) Strategy
- Question: Why acquire full rights for Hulio given the competitive US landscape? (Damyanti Kerai)
- Answer: Hulio is a $200M+ annual franchise for Biocon and is highly successful in Europe. Full integration allows Biocon to control its future destiny, including developing new versions and improving margins (Shreehas Tambe).
GLP-1 and Liraglutide Outlook
- Question: What is the roadmap for Liraglutide and Semaglutide? (Shyam Srinivasan)
- Answer: Liraglutide is scaling in Europe. US launch is pending FDA action. For Semaglutide, filings are advanced in Canada, Brazil, and emerging markets, with launches expected in secondary markets first (Siddharth Mittal).
Debt and Interest Costs
- Question: What is the impact of recent debt retirements? (Vipul Shah)
- Answer: All structured debt (Edelweiss, Kotak, Goldman) is paid off. Finance costs dropped by over ₹62 crores sequentially; debt-to-EBITDA is now below 2.5x (Kedar Upadhye, Kiran Mazumdar-Shaw).
Key Takeaway
Biocon Limited delivered a steady Q3 FY26 with a 9% revenue increase to ₹4,173 crores, marked by a significant operational inflection point as the company concludes its massive de-leveraging cycle. Core EBITDA margins reached 29%, driven by a deliberate shift toward high-margin biosimilar markets in North America and a 24% surge in the Generics segment following EU Liraglutide launches. The group has successfully retired all high-cost structured debt from the Viatris acquisition, reducing its net debt/EBITDA ratio to below 2.5x and paving the way for ₹300 crores in annual interest savings. Strategically, Biocon is now focused on the integration of Biologics into the parent entity and scaling its 17-asset oncology pipeline and GLP-1 portfolio. Management remains confident in a sustainable growth trajectory for FY27, supported by doubled insulin capacity and imminent launches of Denosumab and Aflibercept biosimilars.
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