We increase our TP to `935 (vs. `675), as we raise FY17-18E EPS by 7%\/6%, move to a higher target PE (25x vs. 21x) and roll over to March 18E. Biosimilars is a very promising opportunity and we now see tangible progress (filings, approvals) in Biocon's efforts to target the same. It had to absorb significant pressure on profitability and B\/S due to the relatively small size of its legacy biz but this also implies higher leverage on commercialisation. We reflect this in our valuation, building a premium to mid-cap peers but much below pure biosimilar play, Celltrion (35-40x). The Q1FY17 numbers are skewed on transition to Ind AS accounting, making it difficult to compare with our forecasts but trends were positive: revenues or EBITDA orPAT grew 21%\/28%\/35% y-o-y; Branded formulations and small molecules witnessed good growth after a few quarters while research services (+18%) continued its healthy trend and Biologics (+71%) saw meaningful traction in emerging markets; R&D spend was on the lower side in Q1 (7.2% of biopharma sales, should normalize at c12-14% in FY17) but EBITDA margin (pre- R&D) also improved 56bps y-o-y and 96bps q-o-q . Biocon is an integrated biotechnology company in India that encompasses all critical stages of drug development - drug discovery, development, and manufacturing and commercialization of biopharmaceuticals and enzymes.