Profitable Stocks in Falling Market- Biocon Limited

Biocon Limited, a fully integrated healthcare company was incorporated in the year 1978 as a joint venture between BioconBiochemicals Limited of Ireland and an Indian entrepreneur, Kiran Mazumdar-Shaw. The Companys business model spans the entire drug value chain, from pre-clinical discovery to clinical development and through to commercialisation and focused on biopharmaceuticals, custom research and clinical research. Biocon is an ISO 9001, ISO 14001:2004, ISO 9001:2000, ISO 15189:2003 and also OHSAS 18001:1999 certified for various levels. Biocon have two subsidiary companies for support, namely Syngene International Ltd and Clinigene International Ltd. Biocon has rapidly developed a robust drug pipeline, led by monoclonal antibodies and several other molecules at exciting stages in the biopharmaceutical value chain.OncologyBiocon manufactured and exported enzymes to USA and Europe during the year 1979, as first of its kind. In 1989, Unilever plc acquired the BioconBiochemicals Limited in Ireland and merges it with its subsidiary, Quest International 

  • The commercial success of Biocons proprietary fermentation plant leads to a 3-fold expansion during the year 1996 and also in the same year, the company had leveraged its technology platform to enter biopharmaceuticals and statins. Biocon had spearheads initiatives in human healthcare in the year 1997 through a dedicated manufacturing facility. 
  • As at January 2008, Biocon Limited and IATRICa, Inc made a strategic partnership to co-develop an exclusive new class of immunoconjugates for targeted immunotherapy of cancers and infectious diseases. 
  • Abu Dhabi based pharmaceutical company Neopharma had signed an MOU with the company to establish a JV to manufacture and market a range of biopharmaceuticals for the GCC countries (Gulf Cooperation Council) in the year 2007. 

Fundamental Analysis 
Biocon Limited (“Biocon” or the “Company”) was set up in the year 1978 as a joint venture between BioconBiochemicals Limited of Ireland and an Indian entrepreneur, Kiran Mazumdar-Shaw. Biocon is a fully integrated biopharmaceutical company focused on biopharmaceuticals, customized research and clinical research. The Company has developed a robust drug pipeline and offers active pharmaceutical ingredients (APIs), including cardiovascular agents, anti-obesity agents, oral anti-diabetic agents, anti-inflammatory agents and digestive-aid enzymes.The Company also has commercial and marketing agreements with Pfizer and Ferozsons Laboratories Limited, and licensing agreement with AbraxisBioScience, Inc, as well as strategic collaboration for insulin products with Mylan, Inc.The Company’s brands include Herceptin, Enbrel, MabThera, Remicade, Lantus, Humalog and NovoLog. Beta of the stock for one month range is 0.028. 
  • Average 2 year ROE of Biocon Ltd. 16% 
  • Bought by 34 mutual fund schemes and sold by only 26 mutual fund schemes in last quarter. 
  • The Company has maintained an average dividend yield of 0.82 % over the last 5 financial years.  
  • Net sales of the company has increased from 574.30 crore to 604.70 crore and net profit has increased from 54.50 to 68.40 crore in last quarter 
  • Biocon’s average interest coverage ratio over the last 5 financial years has been 122.48 times which indicates that the Company has been generating enough for the shareholders after servicing its debt obligations. 

Technical Analysis 
Biocon is again on its all-time high levels after split some times before. In the end of 2016 the stock started its major uptrend and gained more than 150 percent in just around 1 year of time period backed by strong fundamentals. Despite of negative trend in the Index in the last week of November the stock managed to close at its highest levels. Earlier the stock swing between 50 points from the last 8 to 10 weeks and now going for new highs. 
  • On weekly chart the stock is trading in a broadening triangle pattern 
  • Broadly the pattern has completed 45 weeks and heading towards its upward trend line 
  • If we draw a trend line from the highs of November 2016 and July 2017, the extension will given the upper range of the stock 
  • 55 day EMA clearly supports the trend line and the stock respects its earlier also on weekly chart ADX also gave cross over on the previous week strong closing 

Buy Biocon December futures between 440 and 450 for the target of 490 to 500 and maintain stop loss below 415. 

Supports and Resistance (Monthly) 

  • Resistance 1- 480 Supports 1- 415 
  • Resistance 2- 515 Supports 2- 387
  • Resistance 3- 550 Supports 3- 355 

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