Biocon Q2 FY27 net profit falls 52% as EBITDA margin drops to 20%

Biocon reported second-quarter (Q2) financial year (FY) 2027 net profit before exceptional items of Rs 44 crore, down 52% year on year, as earnings before interest, tax, depreciation and amortisation (EBITDA) fell 7% to Rs 865 crore and its EBITDA margin declined to 20% from 22%, although revenue from operations rose 2% to Rs 4,389 crore.

How did Biocon perform in Q2 FY27?

Biocon increased revenue from operations to Rs 4,389 crore in Q2 FY27 from Rs 4,296 crore in Q2 FY26, while total revenue rose 1% to Rs 4,423 crore. Revenue from operations also increased 1% from Rs 4,336 crore in Q1 FY27. Net research and development (R&D) expenditure was Rs 237 crore, down 6% from Rs 251 crore a year earlier and 1% from Rs 240 crore in the preceding quarter.

EBITDA declined by Rs 63 crore from Q2 FY26 and by Rs 37 crore from Q1 FY27. The EBITDA margin fell by 2 percentage points year on year, from 22% to 20%, and by 1 percentage point sequentially from 21%. Profit before tax, before exceptional items, was Rs 62 crore, down 66% from Rs 183 crore a year earlier and 56% from Rs 141 crore in Q1 FY27.

Why did Biocon’s Q2 FY27 profit fall despite revenue growth?

Biocon’s presentation does not give a consolidated explanation for the lower quarterly profit, but it records lower EBITDA and margin alongside 2% revenue growth. Net profit before exceptional items was Rs 44 crore against Rs 92 crore in Q2 FY26, while reported net profit was Rs 41 crore against Rs 85 crore. Both measures declined 52% year on year.

The quarter-on-quarter comparison was also lower. Net profit before exceptional items fell 70% from Rs 145 crore in Q1 FY27, while reported net profit fell 71% from Rs 141 crore. Exceptional items, net of tax and non-controlling interest, were negative Rs 3 crore in Q2 FY27, compared with negative Rs 7 crore in Q2 FY26 and negative Rs 4 crore in Q1 FY27.

The presentation identifies a timing issue in the Biosimilars segment rather than for the consolidated business. It says reported Biosimilars growth and margins were affected by the timing of revenue recognition on certain shipments. Biosimilars EBITDA was Rs 623 crore in Q2 FY27, down 7% from Rs 669 crore, and its margin fell to 22% from 25% in both Q2 FY26 and Q1 FY27.

Which Biocon businesses grew and which declined in Q2 FY27?

Biocon’s Biopharmaceuticals revenue rose 5% year on year to Rs 3,583 crore in Q2 FY27, while Services revenue declined 9% to Rs 833 crore. Biopharmaceuticals revenue was 1% below the Rs 3,614 crore recorded in Q1 FY27. Services increased 13% sequentially from Rs 736 crore, but remained below the Rs 911 crore reported a year earlier.

Within Biopharmaceuticals, Biosimilars generated Rs 2,809 crore, up 3% from Rs 2,721 crore in Q2 FY26 but down 2% from Rs 2,855 crore in Q1 FY27. Generics revenue rose 10% year on year to Rs 774 crore and 2% sequentially from Rs 760 crore. The Q2 FY26 Generics comparator of Rs 701 crore excludes a cross-charge for common utilities now included under unallocable expenditure or income.

The Rs 161 crore year-on-year increase in Biopharmaceuticals revenue was partly offset by a Rs 78 crore decline in Services revenue. Biosimilars R&D expenditure rose 12% to Rs 202 crore, or 7.2% of segment revenue, from Rs 180 crore, or 6.6% of revenue. The segment’s EBITDA nevertheless declined by Rs 46 crore from Rs 669 crore to Rs 623 crore.

What do Biocon’s H1 FY27 results show?

Biocon’s first-half (H1) FY27 revenue from operations increased 6% to Rs 8,725 crore, while EBITDA was broadly unchanged at Rs 1,767 crore from Rs 1,774 crore. The EBITDA margin declined to 20% from 22%, and total revenue rose 5% to Rs 8,814 crore. Net R&D expenditure increased 5% to Rs 477 crore, while R&D as a share of revenue excluding Syngene remained at 7%.

H1 Biopharmaceuticals revenue increased by Rs 689 crore, with Biosimilars rising 9% to Rs 5,664 crore and Generics rising 15% to Rs 1,536 crore. Services revenue declined by Rs 216 crore to Rs 1,569 crore. Biosimilars EBITDA rose 2% to Rs 1,351 crore, but its margin fell to 24% from 26% as R&D increased 25% to Rs 394 crore.

H1 profit before tax before exceptional items declined 32% to Rs 203 crore from Rs 297 crore. In contrast, net profit before exceptional items increased 42% to Rs 189 crore from Rs 133 crore, and reported net profit increased 57% to Rs 182 crore from Rs 116 crore. Exceptional items, net of tax and non-controlling interest, were negative Rs 7 crore in H1 FY27 compared with negative Rs 17 crore in H1 FY26; the presentation does not provide a reconciliation for the differing pre-tax and net-profit movements.

Conclusion

Biocon’s Q2 FY27 results show that a Rs 93 crore increase in revenue from operations did not translate into higher operating or quarterly net profit. Biopharmaceuticals revenue rose 5%, led by 10% Generics growth and 3% Biosimilars growth, but Services revenue fell 9% and the group EBITDA margin declined from 22% to 20%.

The next period to watch is H2 FY27, which management expects to be much stronger on launch momentum and additional insulin capacity. The presentation cites the commissioned fill-finish capacity in Malaysia, Yesafili’s US launch, Yesintek’s performance and the 10-year Pertuzumab partnership in Brazil as developments supporting future commercial activity.