Biocon Reports Sharp Decline in Q2 Profit as Logistics Disruptions Delay Biosimilar Revenue; Eyes Stronger Second Half

Bengaluru, November 5: Biocon Limited reported a significant decline in its consolidated net profit for the September quarter of the financial year 2026-27, as delayed product shipments, higher depreciation expenses and continued investments weighed on its financial performance.

The Bengaluru-based biopharmaceutical company announced its second-quarter results on Wednesday, November 4, reporting a 52 per cent year on year decline in consolidated net profit to Rs 41 crore, compared with Rs 85 crore in the corresponding quarter of the previous financial year.

Despite the decline in profitability, the company’s consolidated operating revenue increased 2 per cent to Rs 4,389 crore from Rs 4,296 crore a year earlier.

Consolidated EBITDA stood at Rs 865 crore, registering a 7 per cent decline compared with Rs 928 crore in the September quarter of FY26.

The company’s performance was affected by logistics-related delays that prevented certain biosimilar shipments from being recognised as revenue during the reporting period.

However, Biocon management expressed confidence in a stronger second half of FY27, supported by new product launches, growing demand for insulin and improved performance across its pharmaceutical businesses.

Logistics Disruptions Affect Quarterly Revenue

One of the major factors affecting Biocon’s September-quarter performance was the delay in recognising revenue from certain biosimilar shipments.

According to the company’s management, approximately USD 20 million, equivalent to around Rs 200 crore, in biosimilar revenue could not be recognised during the quarter because shipments were delayed beyond September.

The company subsequently recorded the revenue in October.

Chief Executive Officer and Managing Director Shreehas Tambe indicated that logistics-related challenges, including disruptions associated with the geopolitical situation, affected the timing of certain deliveries.

The management described the issue as a temporary development rather than a reflection of weakening underlying business demand.

The delayed recognition of revenue affected the quarterly financial figures, particularly because the company had expected those shipments to contribute to its September-quarter performance.

Biocon expects the recognition of the deferred revenue, together with contributions from recently launched products, to support its performance in the second half of the financial year.

Biopharma Business Records Growth

Biocon’s biopharmaceutical division continued to demonstrate growth during the reporting period.

Revenue from the biopharma business increased 5 per cent year on year to Rs 3,583 crore.

Within this segment, biosimilars revenue grew 3 per cent to Rs 2,809 crore, while the generics business recorded stronger growth of 10 per cent to Rs 774 crore.

The biosimilars portfolio remains an important growth driver for Biocon, particularly as demand increases for affordable alternatives to expensive biological medicines.

The company has been expanding its presence in international markets through new product introductions, regulatory approvals and partnerships with pharmaceutical companies.

Its recently commercialised products in the United States include Yesafili, a biosimilar version of aflibercept, and Yesintek, a biosimilar version of ustekinumab.

Management said these products were gaining market traction and contributing to the company’s growth strategy.

The company is also focusing on strengthening its insulin franchise, which remains an important part of its international business.

Major Pertuzumab Partnership Strengthens Future Prospects

A significant development during the quarter was Biocon’s agreement for a 10-year biosimilar Pertuzumab partnership in Brazil.

The partnership is valued at approximately USD 400 million and is expected to support the availability of the medicine through Brazil’s public oncology network.

Pertuzumab is used in the treatment of certain types of breast cancer, making the agreement strategically important for Biocon’s oncology portfolio.

The company has also secured favourable commercialisation timelines for its biosimilar Pertuzumab product, Pebrilzo, following a global patent settlement with Genentech.

The settlement provides the company with licensed launch opportunities across Europe, the United Kingdom, the United States and other international markets.

Biocon also received a positive opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use for its biosimilar Pertuzumab.

The development is particularly important because the product became the first monoclonal antibody biosimilar recommended under the European regulator’s tailored clinical development pathway.

These developments could provide additional growth opportunities as the company expands its presence in the global biosimilars market.

Generics Business Shows Improvement

Biocon’s generics division delivered encouraging results during the September quarter.

Revenue from the segment increased 10 per cent year-on-year to Rs 774 crore, supported by improved business activity and better utilisation of manufacturing facilities.

The company’s generics business also recorded a notable improvement in EBITDA, which increased to Rs 64 crore from Rs 7 crore in the corresponding quarter of the previous year.

The improvement reflects better operating efficiency and cost management.

Biocon has been working to strengthen its generics portfolio while expanding its reach across international pharmaceutical markets.

The segment’s performance is important for the company’s broader financial strategy, as it provides an additional source of revenue alongside biosimilars.

Continued improvements in manufacturing efficiency and product availability could further support the division’s contribution to overall profitability.

Syngene Performance and Services Business

Biocon’s services business, which includes its subsidiary Syngene International, also remained an important part of the group’s operations.

Services revenue increased 13 per cent sequentially to Rs 833 crore during the September quarter.

Syngene reported improved business activity compared with the preceding quarter, supported by demand in its contract development and manufacturing organisation business.

However, its year-on-year revenue remained under pressure, reflecting lower contributions from certain customer programmes and other operational factors.

A significant development during the period was the signing of Syngene’s first manufacturing agreement for its Bayview biologics facility in the United States.

The agreement represents progress in expanding the company’s international manufacturing capabilities and strengthening its relationship with global pharmaceutical customers.

Syngene also secured additional manufacturing contracts, including an agreement for clinical supplies from its Bengaluru biologics manufacturing facility.

The company commissioned a new Clinical Translational Sciences laboratory in Bengaluru during the quarter.

These investments are intended to strengthen its integrated research, development and manufacturing services.

Manufacturing Expansion Supports Insulin Business

Biocon is also investing in manufacturing capacity to support the growing international demand for insulin products.

During the quarter, the company operationalised its second Insulin Glargine fill-finish line in Malaysia, with commercial supplies already underway.

The expansion is expected to improve production capacity and support growing demand from international markets, particularly the United States.

The company has also received regulatory approvals from the European Medicines Agency and the United Kingdom’s Medicines and Healthcare products Regulatory Agency for the additional manufacturing line.

Expanding production capabilities is an important component of Biocon’s strategy to strengthen its position in the global diabetes treatment market.

Insulin products remain a significant part of its pharmaceutical portfolio, and additional manufacturing capacity could help the company serve customers more efficiently.

The company is also working to expand its portfolio of biosimilar medicines across oncology, immunology, ophthalmology and other therapeutic areas.

Interest Costs Decline as Company Strengthens Balance Sheet

Despite the decline in quarterly profitability, Biocon recorded an improvement in its interest expenses.

Interest costs declined 12 per cent year-on-year to Rs 240 crore during the September quarter.

The reduction reflects the company’s efforts to strengthen its balance sheet and manage financial obligations.

However, lower interest expenses were insufficient to offset the impact of higher depreciation and amortisation charges, lower other income and delayed biosimilar revenue recognition.

Net profit before exceptional items stood at Rs 44 crore, compared with Rs 92 crore in the corresponding quarter last year.

The reported net profit of Rs 41 crore reflected the additional impact of exceptional items.

The company will need to maintain operational efficiency and generate stronger revenue growth to improve profitability in the coming quarters.

Management Expects Stronger Performance in Second Half

Biocon management remains optimistic about the company’s business prospects for the remaining months of FY27.

The anticipated improvement is expected to come from the growing contribution of recently launched biosimilars, stronger insulin demand and the recognition of revenue from shipments delayed during the September quarter.

The company is also expecting additional contributions from new international partnerships and the expansion of its pharmaceutical portfolio.

CEO Shreehas Tambe indicated that the underlying business remained strong despite the temporary logistical challenges.

The management expects double-digit growth in the biosimilars business during the second half, supported by new product launches and improved commercial performance.

The gradual recovery in Syngene’s business is also expected to contribute to the group’s overall performance.

Biocon Executive Chairperson Kiran Mazumdar-Shaw highlighted the company’s progress in biosimilar innovation and international manufacturing expansion.

She noted that regulatory developments, commercial partnerships and investments in production infrastructure would support the company’s long-term growth ambitions.

Outlook for Biocon in FY27

The September-quarter results present a mixed picture for Biocon, with modest revenue growth accompanied by a substantial decline in profitability.

While logistics disruptions affected the timing of certain shipments, the company continues to pursue opportunities in the expanding global biosimilars and generics markets.

Its partnership in Brazil, progress towards international launches of Pertuzumab and expansion of insulin manufacturing capacity represent important developments for future revenue growth.

The performance of recently launched medicines, recovery in the services business and improvement in operating margins will remain key factors influencing the company’s financial position.

Biocon’s ability to convert its growing product pipeline and international partnerships into consistent commercial revenue will be particularly important during the second half of FY27.

For now, the company is banking on stronger biosimilar sales, improved manufacturing capacity and better operational performance to recover from the weaker September quarter.