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

Fitch Ratings has revised the outlook on Biocon Biologics Limited’s (BBL) Long-Term Foreign-Currency Issuer Default Rating (IDR) to Positive from Stable, while affirming the rating at 'BB-', citing improving financial metrics at its parent, Biocon Limited (BL).

In a statement, Fitch also affirmed the 'BB' rating on BBL's $800 million secured notes, issued by its subsidiary Biocon Biologics Global Plc.

Fitch said BBL's rating is based on the credit profile of its stronger parent under its Parent and Subsidiary Linkage Rating Criteria, noting that BL has "high strategic and operational incentives" to support its subsidiary.

The agency said the Positive Outlook reflects its expectation of a sustained reduction in BL’s financial leverage after it repaid liabilities using proceeds from a recent equity issuance. Fitch added that its forecast does not factor in further adverse developments related to US tariffs or drug pricing policies, but warned that any such developments, if sustained, could slow deleveraging and affect the company’s credit profile.

Fitch noted that around 40% of BBL’s sales come from the US, largely from production sites in India and Malaysia. While escalating trade tensions or new tariffs could pose risks, the agency said the currently announced tariffs and policies do not have a significant impact.

Also Read: BEML to invest ₹1,500 crore in greenfield rail manufacturing facility in MP

According to Fitch, BL’s EBITDA net leverage is expected to fall below 4.0 times in FY26, supported by a projected 12% rise in EBITDA and the use of proceeds from a $460 million equity issuance in January 2026 to repay debt. BL aims to bring leverage below 3.0 times, after it rose following the 2022 acquisition of Viatris Inc.’s biosimilar business.

The agency highlighted BBL’s competitive position in the global biosimilars market, supported by its research and development capabilities and in-house manufacturing. BBL holds the third-largest market share by volume for trastuzumab and the second-largest for pegfilgrastim and insulin glargine in the US, and is among the top-five sellers of several biosimilars in Europe.

Fitch also pointed to BBL’s pipeline of 20 biosimilar assets, with approved portfolios expanding to eight products in the US and nine in Europe, which it said should support healthy sales growth despite some price erosion.

However, Fitch flagged regulatory risks, noting that BBL’s limited production-facility diversification exposes it to above-average risk from adverse regulatory actions, including potential delays in approvals. Any adverse shifts in US drug pricing policy could also negatively affect BL, it added.

On liquidity, Fitch said BL had ready cash of ₹41.7 billion at end-March 2025, which adequately covers near-term debt maturities, although larger repayments, including the $800 million bond due in October 2029, will require refinancing support.

Also Read: Century Plyboards flags demand challenges but sticks to FY26 growth guidance as housing inventory finally hits market