Biocon Stock closed 4 percent lower on Tuesday at Rs 375 compared to earlier close of Rs 390. The stock touched intraday high and low of Rs 395 and Rs 374 respectively. The stock touched 52-week high in today's session but could not sustain at higher levels. If markets open firm tomorrow, we can see Biocon trading positive.

Life Insurance Corporation (LIC) has increased its equity stake in Biocon, a prominent pharmaceutical company, from 4.98% to 5.02%, according to a regulatory filing on Tuesday. This incremental acquisition reflects growing confidence in Biocon, despite its recent mixed financial performance. Axis Direct, a major research house, had previously issued a “BUY” rating for Biocon with a target price of Rs 390, which the stock has already achieved. While revenue remained flat, Biocon’s biosimilars division saw growth, and the company continues to expand its generics and research services. With upcoming launches, LIC's increased stake aligns with expectations of Biocon’s positive long-term financial trajectory.

LIC Increases Stake in Biocon

Life Insurance Corporation (LIC), India’s largest state-owned insurance company, announced on Tuesday that it has augmented its shareholding in Biocon. LIC raised its stake from 4.98% to 5.02%, signaling sustained interest in the pharmaceutical giant. This move adds approximately 500,000 shares to its portfolio, reinforcing the insurer’s long-term confidence in Biocon’s business prospects.

Axis Direct Issues “BUY” Rating for Biocon

In August, Axis Direct, a leading equity research firm, recommended a “BUY” call for Biocon stock at Rs 336, setting a target price of Rs 390. The stock has already reached this price point, underscoring the confidence analysts have in Biocon’s operational resilience and future potential, despite challenging market conditions.

Biocon’s Financial Performance: Mixed Signals

Biocon reported revenue of Rs 3,433 crore for the most recent quarter, which remained flat year-over-year (YoY). However, performance within key business segments varied:

Biosimilars grew by 11% YoY, a positive indicator for Biocon’s ongoing product development.
Generics experienced a 6% decline, reflecting competitive pressures and pricing challenges.
Research services saw a 2% decline, suggesting some volatility in the contract research segment.

Strategic Business Transfer Boosts Margins

Notably, Biocon reported a strategic business transfer agreement with Eris Life Sciences, contributing Rs 1,057 crore to the overall revenue. Despite this, the company’s EBITDA margin settled at 18%, with net profit coming in at Rs 70 crore, falling below market expectations.

New Launches and Expanding Geographies Drive Growth

Biocon’s future growth is underpinned by new launches, including Liraglutide and Micafungin in the generics segment. These products are expected to bolster the company’s market share, with ongoing efforts to penetrate new geographies set to enhance biosimilar sales. The generics pipeline, alongside innovative research services, signals sustained growth momentum in the coming quarters.

Axis Direct Maintains Positive Outlook

Axis Direct reiterated its optimism for Biocon’s financial trajectory, highlighting strong cash flows, robust product pipelines, and global expansion opportunities. The report emphasized upcoming launches in international markets, such as GLP-1 analogs, as key drivers of future performance. With these factors in play, the firm maintains its “BUY” rating with a reaffirmed target price of Rs 390.