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Stocks to Buy: Biocon – A Potential 12% Upside Opportunity

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In this latest stock recommendation from Bajaj Broking's Research Team, Biocon Limited, a leading biotechnology company, has been identified as a key stock to watch. Biocon has shown promising signs of growth both fundamentally and technically, making it an interesting opportunity for investors looking to capture a potential 12% upside in a duration of 35 days. This analysis delves into Biocon’s business prospects, its recent strategic developments, and the technical setup that signals a possible breakout.

Fundamental Outlook: Strategic Expansion in the Global Market

Biocon, known for its focus on manufacturing biotechnology products and providing research services, recently announced a significant deal. The company entered into an exclusive licensing and supply agreement with Handok, a South Korean pharmaceutical leader, to commercialize its complex drug product, Synthetic Liraglutide, which is used for chronic weight management. This collaboration will allow Biocon to handle the drug's development, manufacturing, and supply, while Handok will focus on regulatory approvals and commercialization in South Korea.

The GLP-1 market in South Korea alone is valued at $47 million, presenting a lucrative opportunity for Biocon. Beyond South Korea, Biocon has already secured regulatory approval for Liraglutide in the UK, tapping into a $425 million market for diabetes and weight management drugs. This dual opportunity solidifies Biocon’s standing as a significant player in the biopharma industry.

Technical Outlook: Structural Turnaround in Play

On the technical front, Biocon’s stock price has displayed strong bullish behaviour. A major breakout above a multi-year falling supply line, connecting the highs of CY20 and CY22, indicates a potential structural turnaround. The stock has been trading with higher highs and higher lows, suggesting a long-term uptrend.

Recent corrections in the stock price offer a fresh buying opportunity. Technical indicators, such as the Relative Strength Index (RSI) above 60 and increasing trading volumes, support the bullish outlook. According to Bajaj Broking’s analysis, Biocon is expected to extend up move and head towards 412 levels in the coming months being the 80% retracement of the previous breather ( 482-191). This represents a 12% upside within a 35-day horizon, with a buying range between ₹362-369 and a stop loss at ₹344.

Why Biocon? Key Highlights:

  • Strategic Licensing Agreement: Biocon's partnership with Handok opens doors to a multi-million-dollar opportunity in the South Korean market.
  • Regulatory Success: The first company to secure approval for Liraglutide in the UK, a major win in the diabetes and weight loss segment.
  • Technically Strong: With a clear breakout and strong support from RSI and trading volumes, the technical setup supports a bullish trend.
  • Attractive Entry Point: Recent correction provides a favourable buying window with potential gains up to 12%.

Conclusion

For investors seeking an attractive opportunity in the biotechnology sector, Biocon presents a solid case for investment. Backed by a strong fundamental outlook and a bullish technical setup, this stock is poised for a 12% upside in the coming month. The Bajaj Broking Research Team recommends a buying range of ₹362-369 with a target price of ₹412 and a stop loss at ₹344. This Alpha Trade is ideal for traders looking for a mid-term gain in the biotechnology space.

Note: The figure mentioned are as on 19th Sept 12:45 PM. For more details of this recommendation, you can check out this report by Bajaj Broking Research Desk.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

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