ETMarkets.com|Updated: May 15, 2018, 09.50 AM ISTCentrum Broking has a sell call on Biocon Ltd.
with a target price of Rs 500.
The current market price of Biocon Ltd.
is Rs 634.15.
Time period given by the brokerage is a year when Biocon Ltd.
price can reach the defined target.
Biocon Ltd., incorporated in 1978, is a large-cap pharma company with a market cap of Rs 38049.00 crore.Investment rational by Centrum BrokingWe downgrade Biocon to Sell from Hold rating and revise our TP to Rs 500 (earlier Rs 580) based on 20x March20E EPS of Rs24.8.
Biocons Q4FY18 EBIDTA and net profit were below our estimates due to pricing pressure in the US market and higher tax rate.
The companys revenue grew by 26% YoY in Q4FY18, EBIDTA margin declined by 20bps to 19.9% and net profit grew 2% YoY due to lower margin and higher tax rate.
The companys sterile manufacturing facility at Bangalore was inspected by US FDA and EU Authorities and has made seven six observations respectively.
Key risks to our assumptions are pricing pressure in the US market and delays in receiving regulatory approvals for its biosimilar products.
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