Biocon shares are in the spotlight following a mixed Q3FY25 performance, with HSBC maintaining a bullish stance and Jefferies adopting a more cautious outlook. The stock is currently trading at ₹361.65, with HSBC projecting a potential 19% upside, while Jefferies remains neutral with limited upside.
HSBC has reiterated its Buy rating on Biocon with a target price of ₹430, suggesting a potential 19% upside from the current market price. Although Q3 results came in below estimates, HSBC noted that the sequential pick-up in revenue across segments is a reassuring sign of recovery. The brokerage believes Biocon is well-positioned for an operational turnaround, driven by the launch and execution of high-value biosimilars. One of the key catalysts in the near term is the launch of insulin aspart from Malaysia, which is expected to bolster Biocon’s revenue and strengthen its position in the biosimilars market.
On the other hand, Jefferies has maintained a Hold rating with a target price of ₹400, implying a modest 11% upside. The brokerage highlighted that Q3 performance missed estimates due to a soft showing in the generics and biosimilars divisions. However, Jefferies anticipates growth to pick up in the coming quarters, supported by the launch of Liraglutide in the UK/EU and the bStelara launch in the US expected in February 2025.
Jefferies emphasized that the key factors to watch will be market share gains from these new launches and the company’s ability to generate free cash flow (FCF), especially given Biocon’s high capex intensity, which is expected to continue. Reflecting the near-term challenges, Jefferies has cut its FY26/27 EBITDA estimates by 4% and 5%, respectively.
While HSBC remains optimistic about Biocon’s potential for an operational turnaround, Jefferies’ cautious approach highlights the importance of execution in upcoming biosimilar launches and managing capex-related pressures. The stock’s trajectory will depend on how effectively Biocon can capture market share in its new products and improve cash flow generation.
(Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should consult their financial advisors before making any investment decisions.)