Biocon Q1 Review: Expect Growth In Second Half Of 2022, Says CEO Siddharth Mittal
Rising input costs, increments given to employees and currency value fluctuation impacted the margin, Mittal said.
Biocon Ltd. is expecting growth in the second half of 2022 even as it missed forecasts in the first quarter.
"We have had robust growth of 23% compared to last year. We expect more product approvals, newer capacities to be qualified and commissioned which will lead to increased supply to customers, and increase in market share of already launched products such as the biosimilar Glargine," Siddharth Mittal, managing director and chief executive officer at Biocon, told BQ Prime's Niraj Shah.
Research and development expenditure rose significantly from Rs 130 crore last year to Rs 198 crore this year, which is close to 13% of revenues, and it impacted the margin, he said.
According to him, though the R&D expenses tend to be "lumpy", it will lead to growth as products progress in the market.
Rising input costs, increments given to employees and currency value fluctuation are other factors that have impacted the margin, Mittal said.
If there is a need to meet orders even on low margins, Biocon may do so while ensuring sustainable performance and cut input costs, he said. Along with maintaining a profitable business, "we cannot have our patients run out of medicine", Mittal said.
He gave the example of 'statins', which is a large segment of the generics business and is heavily dependent on solvents. Some of the statins "have seen negative margins but we nevertheless continue to service those customers", said Mittal.
Biocon expects Glargine, a synthetic version of insulin, to expand to the mid-to-high teens by the end of this fiscal.
"We are already at 10% and basis the contract Mylan Viatris is working on, we expect mid-to-low teens kind of market share by the end of this calendar year. By the end of this fiscal, we expect to be at mid-teens level."