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Biocon shares slip 3% as Q1 results miss estimates; should you sell?

Shares of Biocon fell over 3 per cent on Monday after the company reported a 95.2 per cent year-on-year (Y-o-Y) decline in net profit in the first quarter of the current financial year (Q1FY26). The biopharma company's stock fell as much as 3.60 per cent during the day to ₹331 per share, the lowest level since June 6 this year. The stock pared losses to trade 0.9 per cent higher at ₹340.4 apiece, compared to a 0.22 per cent advance in Nifty 50 as of 11:45 AM. Shares of the company fell for the second straight day and currently trade at 1.5 times the average 30-day trading volume, according to Bloomberg. The counter has fallen 7.2 per cent this year, compared to a 3.3 per cent advance in the benchmark Nifty 50. Biocon has a total market capitalisation of ₹45,349.81 crore. Biocon Q1 results The Bengaluru-based company reported a 95.2 per cent Y-o-Y drop in consolidated net profit at ₹31 crore in Q1FY26, compared to ₹660 crore in the same period last year. The Q1 FY25 profit included a one-time divestment gain, impacting this year's base. The firm's revenue rose 15 per cent to ₹4,022 crore on a like-for-like basis after adjusting for the one-time gain in the base quarter. Operating revenue increased 15 per cent to ₹3,942 crore in Q1 FY26, up from ₹3,433 crore in Q1 FY25. The generics business reported revenue of ₹697 crore, a 6 per cent Y-o-Y increase, while the CRDMO business, Syngene, reported revenue of ₹875 crore, up 11 per cent Y-o-Y. 'Biocon opened FY26 with a strong performance, driven by continued gains in biosimilars and CRDMO, and a steady showing in generics. The recent QIP has strengthened our balance sheet and enabled us to increase our ownership in Biocon Biologics by facilitating the exit of structured equity investors, aligning capital structure with long-term strategic priorities,' said Kiran Mazumdar-Shaw, chairperson, Biocon Group. Analysts in Biocon earnings Nuvama Institutional Equities said Biocon's Q1FY26 revenue and Ebitda missed consensus estimates by 2 per cent and 11 per cent, respectively, due to weakness in the generics segment. The brokerage noted market share gains in key biosimilar products, steady margins, and upcoming launches of bAspart, denosumab, bevacizumab, and bEylea as positive signs. However, it said execution will be critical to achieving high growth, with the generics segment still dragging and consistent margin delivery yet to be demonstrated amid elevated costs from new facilities. Nuvama maintained its 'Hold' rating on the stock, with a revised target price of ₹365, up from ₹345 earlier. Motilal Oswal said Biocon's Q1FY26 financial performance came in below expectations, primarily due to a sharp decline in generics sales and higher operating expenses. The brokerage noted that Biocon is building growth levers across its generics, biologics, and Syngene businesses, with an encouraging product pipeline in both generics and biologics. It cut its earnings estimates by 7 per cent for FY26 and 3 per cent for FY27, while maintaining a 'Buy' rating with a target price of ₹410.