Fitch revises Biocon Biologics outlook to Positive, affirms rating at BB- – CNBC TV18

Fitch Rankings has revised the outlook on Biocon Biologics Restricted’s (BBL) Lengthy-Time period International-Forex Issuer Default Rating (IDR) to Optimistic from Steady, whereas affirming the rating at ‘BB-‘, citing enhancing monetary metrics at its dad or mum, Biocon Restricted (BL).

In a press release, Fitch additionally affirmed the ‘BB’ rating on BBL’s $800 million secured notes, issued by its subsidiary Biocon Biologics World Plc.

Fitch mentioned BBL’s rating relies on the credit score profile of its stronger dad or mum underneath its Father or mother and Subsidiary Linkage Rating Standards, noting that BL has “excessive strategic and operational incentives” to help its subsidiary.

The company mentioned the Optimistic Outlook displays its expectation of a sustained discount in BL’s monetary leverage after it repaid liabilities utilizing proceeds from a latest fairness issuance. Fitch added that its forecast doesn’t think about additional hostile developments associated to US tariffs or drug pricing insurance policies, however warned that any such developments, if sustained, might gradual deleveraging and have an effect on the corporate’s credit score profile.

Fitch famous that round 40% of BBL’s gross sales come from the US, largely from manufacturing websites in India and Malaysia. Whereas escalating commerce tensions or new tariffs might pose dangers, the company mentioned the presently introduced tariffs and insurance policies do not need a major impression.

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In accordance to Fitch, BL’s EBITDA internet leverage is predicted to fall beneath 4.0 occasions in FY26, supported by a projected 12% rise in EBITDA and the usage of proceeds from a $460 million fairness issuance in January 2026 to repay debt. BL goals to carry leverage beneath 3.0 occasions, after it rose following the 2022 acquisition of Viatris Inc.’s biosimilar enterprise.

The company highlighted BBL’s aggressive place within the world biosimilars market, supported by its analysis and growth capabilities and in-home manufacturing. BBL holds the third-largest market share by quantity for trastuzumab and the second-largest for pegfilgrastim and insulin glargine within the US, and is among the many high-5 sellers of a number of biosimilars in Europe.

Fitch additionally pointed to BBL’s pipeline of 20 biosimilar belongings, with permitted portfolios increasing to eight merchandise within the US and 9 in Europe, which it mentioned ought to help wholesome gross sales progress regardless of some worth erosion.

Nevertheless, Fitch flagged regulatory dangers, noting that BBL’s restricted manufacturing-facility diversification exposes it to above-common threat from hostile regulatory actions, together with potential delays in approvals. Any hostile shifts in US drug pricing coverage might additionally negatively have an effect on BL, it added.

On liquidity, Fitch mentioned BL had prepared money of ₹41.7 billion at finish-March 2025, which adequately covers close to-time period debt maturities, though bigger repayments, together with the $800 million bond due in October 2029, would require refinancing help.

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