Biocon shares underperform pharma index in a year; global brokerage retains sell

Stocks

Global research firm CLSA has maintained sell on the stock with target at Rs 260 per share. It is of the view that cash flow remained negative for an eighth consecutive year in FY21 with operating cash flow falling 24 percent YoY and capex intensity remaining high.

Biocon

Biocon

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Biocon share price was down over 2 percent intraday on July 6. The Nifty Pharma index has returned over 45 percent against the stock which has remained flat for the last 12 months.

The stock was trading at Rs 395.05, down Rs 8.35, or 2.07 percent at 11:44 hours. It has touched an intraday high of Rs 404.00 and an intraday low of Rs 394.10.

Biocon has been in focus for the wrong reason as market regulator Sebi has restrained an official of Biocon Ltd from accessing the securities market for three months and also levied monetary penalty for contravening insider trading norms.

Also Read:┬áSEBI bars Biocon’s official from securities market for 3 months, levies fine

Biocon had announced information relating to its collaboration with Sandoz and the period of unpublished price sensitive information (UPSI) was from December 20, 2017 to January 18, 2018, The Securities and Exchange Board of India (Sebi) noted in an order passed late on Wednesday.

Senior vice president of Biocon, Shreehas P Tambe, being an insider traded in the shares of the firm between December 19-27, 2017, in violation of market norms.

Global research firm CLSA has maintained sell on the stock with target at Rs 260 per share. It is of the view that cash flow remained negative for an eighth consecutive year in FY21 with operating cash flow falling 24 percent YoY and capex intensity remaining high, according to a CNBC-TV18 report.

“The Rs 2,200 crore FY22 capex guidance suggests capex intensity will remain high. A slump in the margin in Biologics hurt overall profitability. FY21 report lacks mention of listing plans for the Biologics business,” it added.

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Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.