Investment Idea- 4 Biocon –Unfolding Value

Biocon is recommended for a medium term Investment (3-4 Months)
CMP : Rs. 417
Medium term target : Rs.500
Long term target : Rs.600-700 (depends on growth delivered by the company)

What holds the future for Biocon ?
Biocon generates 78% of its revenues for Bip-pharmaceuticals and only 9% from research services. However, the company is looking at Research services to be the Key growth drivers of its future earnings together with its leadership in the Insulin segment.

Performance
The company has delivered good results . The sales have crossed Rs. 700 crores . The profit after tax has increased by 49%. The company has also declared 40% dividend.
The company has entered into strategic alliance with Vaccinex.Inc USA,to discover and co-develop therapeutic antibody products. This partnership is expected to open up a Multi Billion dollar opportunity for Biocon.
The EPS for FY04-05 was Rs. 20 which converts into P/E of 21 for the current market price.
Promoter hold 65% stake in the company.

About Biocon
Biocon is India's leading biotechnology enterprise. It is ranked No. 1 Biotech company in India and No.16 in the world It is the largest and only USFDA approved producer and exporters of STATINS. The company boasts of Asia largest Insulin plant located in Bangalore. Biocon R&D has key focus areas of Diabetes and oncolgy which could result to be a major revenue generator in coming years. India has 31 Million diabetic cases in year 2000 and this number is expected to go to 79 million by year 2030.
Biocon has alliance with CIMAB to work for clinical research for neck and head cancer.

Key products
Human Insulin, Oral Anti diabetic, statins, tacrolimus, sirolimus

7 comments:

glassnost said...

Hats off to you Mr Rasoni!
You have scientifically and logically analysed the Biocon stock.
It is an excellent stock likely to explode when the effect of new investment kicks in.
Can you give your analysis of the new IPO YES BANK which is coming out next week.
Whether to go for it or skip or avoid and wait for better ones like BHEL, NPC, PGCIL etc

glassnost said...

Your response on YES BANK pl!

Rajesh Soni said...

Regarding Glassnost's comment :
Dear Glassnost,
Please give me some time to study the offerings and then I will post my views on the IPO of Yes Bank.
Thaks for your patience.
Regards
Rajesh Soni

Anonymous said...

Dear Rajesh,

Why Biocon is gowing down and this time again below 420.

Pramod

Amit said...

Interesting, we seem to be tracking Biocon at around the same time! Do have a look at my post on www.journeytowealth.blogspot.com.

I bought Biocon when it hit 395 and am pretty confident on it doing well over the next few years.

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