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Syngene Q3FY25 - Decent growth although FY25 revenue growth guidance lowered from high-single digit to mid-single digit


Revenue grew ~11% YoY to Rs 943.7 crore driven by Discovery Services division (~60% of the sales) on the back of conversion of on pilot projects into full-fledged contracts and decent traction from CDMO business (~40% of the sales) which witnessed increased traction in biologics.
EBITDA grew ~23% YoY to ₹ 283.6 crore with margins improvement of ~293 bps YoY to 30.1% driven by GPM improvement of ~266 bps YoY to 74.8%.
The management has trimmed down the full year revenue growth guidance from high single digit to low-mid single digit as the assessment of improvement in US biotech funding scenario has not panned out as per management expectations and in fact the order flows are delayed by almost 8-12 weeks.
However, the management continues to be optimistic about the prospects of both the discovery and Development / manufacturing based on new collaborations on integrated projects that cover the scope from drug development to clinical stage manufacturing.
We expect some quarterly fluctuations to persist; however, we remain unperturbed as the long-term outlook remains strong, supported by opportunities arising from China rebalancing and an improved biotech funding environment in the US. The company remains a compelling play in the global CRDMO space with it’s track record and facilities.
We value Syngene at ₹ 960 per share.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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