InvestorQ : I had sold out of Biocon few months back months back and have been looking to re-enter the stock. Can I buy now after the latest quarter results of Biocon?
Archita Jajjoo made post

I had sold out of Biocon few months back months back and have been looking to re-enter the stock. Can I buy now after the latest quarter results of Biocon?

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sarah Leo answered.
2 years ago
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Biocon has focused largely on the bio-similar business and has showed good traction in revenue and profit growth in the last few years.

How did the Q4 results look like for Biocon?

For the fourth quarter ended March 2019, Biocon saw 64% growth in net profits to Rs.214 crore and total revenues in the quarter were up by 27% at Rs.1557 crore. The company also reported operation margins (OPM) of 28% compared to its normal range of around 24%. For the full financial year 2018-19, the company saw 31% growth in sales revenues and 143% jump in its net profits. The big thrust to Biocon performance came from the 97% growth in its biological business which is less vulnerable to global generic demand patterns. Biocon’s research subsidiary, Syngene, also recorded 34% growth in its business.

Is it a good time to enter Biocon at the current price levels?

Biocon is currently quoting at around Rs.620 and at the current market price it is quoting at a premium to the pharma industry valuations. However, this can be largely justified by the rapid growth shown by the company in the last few years including the latest quarter. The stock is currently down about 15% lower from its September peak and that gives a good buying opportunity considering that the stock has not been too volatile in the last few years. It is a good play on bio-similar products and small molecules and one can look at a price target of Rs.800 in the next 6 months.

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