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S&P Global Upgrades Biocon Biologics Rating to 'BB+'; Outlook Revised to Stable
S&P Global has upgraded Biocon Biologics' credit rating to 'BB+' from 'BB' following a significant reduction in the company's adjusted debt. This upgrade follows the settlement of a $1 billion CCPS liability to Viatris through a mix of equity and cash, simplifying the capital structure. Adjusted debt is projected to fall to INR 115 billion by FY26 from INR 248 billion in FY25, significantly improving the company's financial health. Analysts expect EBITDA to grow to INR 45 billion by FY27, driven by a 15% growth in the biosimilars segment.
Key Highlights
Credit rating upgraded to 'BB+' from 'BB' with a 'Stable' outlook by S&P Global.
Adjusted debt forecasted to decline to INR 115 billion by FY26, down from INR 248 billion in FY25.
FFO-to-debt ratio expected to improve from under 10% in FY25 to 30% by FY27.
Settled $1 billion CCPS to Viatris using $460 million in fresh equity and share swaps.
EBITDA projected to reach INR 45 billion by FY27 with steady margins of 22-23%.
💼 Action for Investors
This upgrade marks a critical de-risking milestone for Biocon as it successfully manages the high leverage from the Viatris acquisition. Investors should monitor the execution of new biosimilar launches like bStelara and Aflibercept as primary drivers for future valuation re-rating.