Biocon shares slipped more than 3% after Citi downgraded the stock to Sell, citing weakening biosimilar pricing trends, intensifying competition, and regulatory changes that could pressure future earnings. The brokerage cut its target price to ₹360.
Citi noted that while Biocon remains among the strongest global players in biosimilar R&D and execution, pricing softness continues across key in-market products. Several upcoming pipeline molecules are also facing heightened competition, raising the risk that biosimilar revenues may fall short of street expectations.
The report highlighted that Biocon Biologics’ core margins were largely flat in the first half of FY26, despite the major launch of Ustekinumab in the US—an indication that pricing pressure in the US biosimilars market remains a challenge. Citi also flagged the USFDA’s updated guidelines removing the requirement for Phase 3 trials for certain biosimilars, saying the change could attract more players and intensify competition, putting pressure on valuations that are already trading above their 5-year averages.
Citi lowered its valuation multiples for both the biosimilars and generics businesses to reflect these concerns, while keeping the research services multiple unchanged. The firm’s FY27–28 EBITDA estimates are now 7–10% below consensus.
However, the brokerage did note potential upside risks, including stronger-than-expected market share gains, improved pricing in biosimilars, a rebound in biotech funding, and higher growth momentum in research services.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
