Biocon Q4 net profit dips 3%

Written by fe Bureau | Bangalore | Updated: Apr 28 2012, 08:45am hrs
Biopharma major Biocon has registered a 3% dip in fourth quarter net profit on account of poor licensing income. Analysts were expecting a deeper fall in the net profit due to the dissolution of Biocon's marketing pact with global pharma giant Pfizer earlier this year.

The markets reacted positively to the results, with the shares of the company rising by 4% on the BSE on Friday, to close at R239.15.

Biocon's profit after tax stood at R98 crore against R100 crore in the year-ago period, while earnings per share remained constant at R4.90. Revenues surged by 25% year on year to R611 crore, from R487 crore, led by a 29% revenue growth in Syngene, the company's contract research arm. Syngene added 20 new customers during the year.

Kiran Mazumdar-Shaw, chairperson and managing director of Biocon, said, Group sales have risen by 16% and PAT was sustained at previous year's levels despite lower net licensing income. We have delivered particularly strong growth in our research services and branded formulations business verticals. Our balance sheet remains robust and our cash position is strong.

Biocon's operating margins for the quarter stood at 18.2%, an improvement over 16% compared to the year-ago period.

Markets had estimated a much larger impact due to the exit of Pfizer from the marketing partnership this year. To an extent, the concerns were valid, reflected in the 3% drop in profits. However, this is a very small impact, and in that sense Biocon managed to beat expectations. Margins have also seen improvement, said Jagannadham Thunuguntla, strategist & head of research, SMC Global Securities.

Last month, Pfizer and Biocon had called off a $350-million year-old global alliance to commercialise the Bangalore-based firm's insulin and insulin analog products, on account of 'independent priorities'. Biocon officials said they are relooking the global partner model, and instead searching for several local partnerships.

We had several local alliances prior to the Pfizer deal, like one in Mexico with Lab Pisa, and we will continue to look for strong local representation in places like Indonesia, Brazil, Mexico, Egypt, Tunisia and Thailand, said Mazumdar-Shaw.

Biocon is also scouting for partners for some of its research programmes.