Biocon Share Price Target at Rs 520: Motilal Oswal

Keshav Seth 9 August 2026

Motilal Oswal reiterated a "Buy" rating for Biocon with a price target of Rs520. The target has been revised but positive view on the stock remains intact. Overall market sentiment is positive for pharmaceutical sector.

Biocon posted in-line revenue for the June quarter, but profitability fell short of analyst expectations as its biosimilars and generics businesses carried growth while research-services arm Syngene weighed on results. Motilal Oswal reiterated a "Buy" rating with a revised target price of Rs520, citing accelerating biosimilar launches, improving generics margins driven by Liraglutide sales, and a multi-year turnaround plan at Syngene. The brokerage trimmed its FY27 and FY28 earnings estimates by 12% and 3%, respectively, citing near-term weakness in research services even as manufacturing capacity expansion and new product approvals support the company's longer-term outlook.

Quarterly Snapshot: Growth Intact, Margins Under Pressure

Biocon's consolidated revenue rose 10% year-over-year to Rs43.4 billion in the first quarter of fiscal 2027, broadly matching estimates but falling short of the Rs45.9 billion analysts had projected. Earnings before interest, taxes, depreciation and amortization, or EBITDA, grew 10.7% year-over-year to Rs8.5 billion, a 16% miss against consensus estimates of Rs10 billion. Adjusted profit after tax also missed forecasts by 28%, though it still climbed nearly fourfold year-over-year to Rs1.5 billion, aided by a tax benefit recorded during the quarter.

Gross margin expanded 150 basis points year-over-year to 63.1%, while EBITDA margin held roughly steady at 19.5%, below the 21.9% analysts had expected. Other expenses rose as a share of sales, and research and development spending inched up 30 basis points year-over-year. The company also booked a one-time charge of Rs130 million tied to employee termination benefits during the quarter.

Metric (Rs billion)	1QFY26	1QFY27	YoY Change
Net Sales	39.42	43.36	+10.0%
EBITDA	7.65	8.47	+10.7%
EBITDA Margin	19.4%	19.5%	+10bp
Adjusted PAT	0.30	1.46	+386.7%

Segment Performance: Three Businesses, Three Trajectories

Biosimilars

North America Leads a Broad-Based Ramp-Up

Biologics revenue, which includes biosimilars, grew 16% year-over-year to Rs28.6 billion, led by the North American market. Growth came from newly launched biosimilars Bosaya and Aukelso, both versions of Denosumab, alongside steady performance in oncology. Biocon also secured Health Canada approval for an autoinjector pen version of its Ustekinumab biosimilar Yesintek and began selling its Aflibercept biosimilar Yesafili in the United States as an interchangeable product. In Europe, the company launched its Denosumab biosimilar Evfraxy across multiple markets and began selling its Bevacizumab biosimilar Abevmy in the Czech Republic and Switzerland. Motilal Oswal expects the segment's revenue to grow at a 16% compound annual rate through fiscal 2028, reaching Rs140 billion, with a second product line at Biocon's Malaysia insulin facility expected to ease manufacturing capacity constraints.

Generics

Liraglutide Sales Drive a Margin Turnaround

Generics revenue climbed 21% year-over-year to Rs7.6 billion, driven largely by higher sales of generic Liraglutide, a diabetes and weight-management drug, particularly in the United States. Segment EBITDA margin expanded 250 basis points year-over-year to 7%, which Motilal Oswal attributed to premium pricing on active pharmaceutical ingredients, a leaner research and development portfolio, and continued cost discipline following past integration efforts. The brokerage expects new product launches and deeper market penetration to support a 16% revenue compound annual growth rate for the segment through fiscal 2028.

Research Services

Syngene Navigates a Transition Year

Revenue at Syngene, Biocon's contract research and manufacturing arm, fell 16% year-over-year to Rs7.4 billion, hurt by reduced orders from a key biologics client. Management has described fiscal 2027 as a transition year, with a new leadership team focused on strengthening commercial execution and building a leaner, more competitive organization. Syngene also entered a strategic research collaboration with the Translational Health Science and Technology Institute and continues investing in artificial-intelligence-enabled drug discovery tools. Motilal Oswal expects a return to sustainable profitable growth only from fiscal 2028 and forecasts Syngene's revenue will decline at a 3.4% compound annual rate through fiscal 2028, to Rs34.9 billion.

Valuation: Sum-of-the-Parts Backs a Rs520 Target

Motilal Oswal values Biocon on a sum-of-the-parts basis, applying 22 times enterprise value to EBITDA for the biosimilars business, 10 times enterprise value to EBITDA for generics, and a 15% holding-company discount to its Syngene stake. That framework yields a target price of Rs520, representing 19% upside from the current market price of Rs437. The brokerage's revised estimates put consolidated EBITDA at Rs40.1 billion for fiscal 2027 and Rs47.4 billion for fiscal 2028, with adjusted earnings per share expected to more than double this year to Rs5.4, then rise further to Rs8.4 in fiscal 2028.

Biocon management reiterated its full-year EBITDA margin guidance of roughly 24-25% and said it is evaluating local partnerships in the United States to support commercialization, while holding off on incremental U.S. manufacturing capital expenditure. The company also completed a share-swap transaction during the quarter to acquire the remaining equity in Biocon Biologics, making it a wholly owned subsidiary.

Source: Motilal Oswal Financial Services, 1QFY27 Results Update, August 6, 2026.

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