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Syngene reports well-rounded growth, upbeat guidance - Q4 Review

ICICIdirect Research 28 Apr 2023 DISCLAIMER

What's Buzzing? 

Syngene reported a strong set of numbers driven by incremental orders from existing clients, new contract executions, reflecting revival signs of the CRAMs ecosystem. 


Revenues grew 31.2% YoY to Rs 994.4 crore in Q4FY23. This was largely driven by its integrated services and execution capabilities, which led to such a robust performance across all its divisions. GPM came at 70.5% during the period, lower than the normal range of 72-73% due to higher manufacturing mix and higher consumables charges. On the operational front, EBITDA grew 27.2% YoY to Rs 318.3 crore whereas margins declined 101 bps YoY to ~32%. Net profit during the quarter grew 20.9% YoY to Rs 178.7 crore. 

Our Perspective 

In a scenario where most of the CRAMS players are witnessing a slowdown or business realignment, Syngene continues to deliver standout numbers driven by all core segments. Syngene has proposed overall capex of ~Rs 800 crore investing in new infrastructure, technology, capability-building and talent development, of which ~Rs 240 crore is committed where projects are under execution. Going ahead, Syngene’s revenue mix is expected to showcase visible shift towards development and manufacturing business, with manufacturing starting to play a more prominent role. Syngene's management has guided for high teen constant currency growth for FY24 on the back of strong order book and increased set-up across discovery and development.

We believe Syngene remains a compelling play in the CRO space with elite client profile and is well positioned for sustainable growth.

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