Alert: Why DIIs are doubling down on these 2 biotech companies

India is one of the top 12 biotechnology markets in the world and the third largest in the Asia-Pacific region. The industry has grown from US$ 10B in 2015 to US$ 130B in 2024, is projected to reach US$ 300B by 2030. The biotech sector has expanded from 50 startups in 2014 to nearly 9,000 by end of 2024, reflecting a decade of strong growth in the bioeconomy.

Even the Union Budget 2025-26 strengthens India’s biotechnology sector with increased funding for the Department of Biotechnology (DBT) to support R&D, biomanufacturing, and startups. It allocates Rs. 20,000 crore (US$ 2.30 billion) for private research, launches the National Manufacturing Mission, and promotes AI-driven biotech, precision farming, biofuels, and genetic research, driving innovation and sustainability.

No wonder some of the leading DIIs in India have significantly increased their holdings in these 2 biotech companies. Do you own any of them?

Sai Life Sciences Ltd

Incorporated in 1999, Sai Life Sciences Ltd carries out contract research and manufacturing activities for customers engaged in pharmaceutical and biotechnology industries.

With a market cap of Rs 17,283 cr, the company offers integrated services across the pharmaceutical lifecycle from discovery services to development and manufacturing of new chemical entities to global innovator pharmaceutical and biotechnology companies.

The company, listed in December 2024, saw its DII holding increase from 12% at listing to 13% by March 2025. Filings for the June 2025 quarter revealed a big jump to 22%, marking a huge increase in DII holding from the previous quarter. This is how the current holding looks like:

Sales for Sai Life Sciences grew at a compounded rate of 18% from Rs 725 cr in FY20 to Rs 1,642 in FY25.

EBITDA (earnings before interest, taxes, depreciation, and amortization) went from Rs 170 cr to Rs 390 cr in the same period, logging in a compound growth of 18%.

The net profits also went from Rs 80 cr in FY20 to Rs 173 cr in FY25, which is a compounded growth rate of 17%.

The share price of Sai Life Sciences Ltd was around Rs 760 when it was listed in December 2024, and as of 8^th August 2025 it was Rs 840, which is almost an 11% jump in just about 9 months.

The stock is trading at a P/E of 100x, which is much higher than the current Industry median of 32x. It would be too soon to look at the long-term median for the company, but the 10-year industry median currently at 27x.

With investments of over Rs 134 cr in Q1FY26 for new R&D facilities, including a Peptide Research Centre and a Process R&D Block in Hyderabad, and a 91 KL capacity addition at Bidar, the company is strategically expanding its infrastructure. The aim is to nearly double its manufacturing capacity to ~900 KL by Q3FY27.

Company is also coming up with a second manufacturing site in Hyderabad to enhance capabilities in complex modalities like peptides and oligonucleotides, and to leverage next-gen biology, automation, and AI positioning them as a key partner for global pharma innovation.

Biocon Ltd

Incorporate din 1978, Biocon Ltd is engaged in the business of manufacture of biotechnology products and research services.

With a market cap of Rs 45,905 cr, the company is one of the top 5 global players in biosimilars and among the top 3 in insulins. It ranks in the top 15 companies worldwide for biomanufacturing capacity and has a presence in 120+ countries, including the U.S., Europe, and emerging markets.

Just like Sai Life Science, Biocon has also seen a jump in the DII holdings. The holdings which were at 16% as off the quarter ending March 2025 jumped to 23% as of the quarter ending June 2025. This again is a huge jump. The current DII holdings look like this:

Coming to financials, the company’s sales grew at a compounded rate of 19% from Rs 6,300 cr in FY20 to Rs 15,262 in FY25.

EBITDA more than doubled from Rs 1,575 cr in FY20 to Rs 3,254 cr in FY25, logging in a compounded growth of 16%.

Net profit also grew from Rs 871 cr in FY20 to Rs 1,429 cr in FY25, which is a compounded growth of 7%.

The share price of Biocon Ltd was around Rs 400 in August 2020 and as of 8^th August 2025, the price is at Rs 352, which is a drop despite of the strong financials.

The company’s shares are trading at a PE of 113x, which is once again much higher than the current Industry median of 32x. The 10-year median PE for Biocon 45x and the industry median for the same period is 27x.

According to the company’s May 2025 investor presentation, the business is entering a phase of accelerated growth, underpinned by a robust biosimilars pipeline, capacity expansions, and strategic moves (including potential corporate restructuring). Despite ongoing pricing pressure and regulatory dependencies, management remains confident, citing strong market access, growing global demand (especially in insulins and GLP-1s), and a disciplined approach to capital allocation and R&D investment.

Buy The Bio?

While the financials for both the companies we saw today, Sai Life Sciences and Biocon have logged in some pretty solid figures, the share price growth of both tell a different story. While Sai Life Sciences is trading close to its all-time high price, Biocon is trading at a good discount from its all-time high price.

Given the projections for the industry and the sustained growth these 2 companies have shown in the last few years, the DII investments and subsequent jumps make sense. But which way will these bets go is something that we have to wait and watch.

It would be a great idea to keep a close eye on these stocks to see how these projections and the DII investments work out in the short and long term.

Disclaimer

Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information. 

The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only. 

Suhel Khan has been a passionate follower of the markets for over a decade. During this period, He was an integral part of a leading Equity Research organisation based in Mumbai as the Head of Sales & Marketing. Presently, he is spending most of his time dissecting the investments and strategies of the Super Investors of India.

Disclosure: The writer and his dependents do not hold the stocks discussed in this article. 

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