Syngene International reported a net profit of Rs 188.6 crore in the quarter ended March 31, 2024, a rise of five percent from Rs 178 crore recorded by the listed contract research and manufacturing services arm of Biocon a year back. The company's net profit increased from Rs 112 crore it had posted in the December quarter.
Syngene's revenue in the fourth quarter of the reported financial year fell eight percent on a year-on-year basis to Rs 916.9 crore, compared to Rs 994 crore in Q4FY23. On a sequential basis, the revenue rose from Rs 853.5 crore the pharma R&D firm had posted the previous quarter.
For the full year ending March 31, 2024, revenue from operations was up 9 percent to Rs. 3,489 crore resulting in profit after tax, before exceptional items, up 12 percent to Rs. 519 crore.
Syngene's EBITDA came in at Rs 333 crore in Q4FY24 against Rs 337 crore it had posted a year ago. The Biocon subsidiary's EBITDA margin rose to 36 percent in the March quarter on a YoY basis. Its margin was at 33 percent in Q4FY23.
“While the fourth quarter performance came in lower than expected, the underlying driver - reduced demand for research and development services within US biotech stemming from a difficult funding environment - is well understood and already showing positive signs of recovery," said Jonathan Hunt, Managing Director and Chief Executive Officer, Syngene International Limited.
" We expect the EBITDA margin to be similar to the level delivered in fiscal year 2024 and PAT growth in single digits. The long-term indicators for the sector are positive and I am confident that we will continue to perform well in the long term," Hunt added.
Syngene International Ltd is the country's largest integrated CRAMS/CRDMO, offering services to various sectors, including pharmaceuticals, biotechnology, and consumer goods.
Earlier in the month, Goldman Sachs had initated coverage on Syngene and had given a 'buy' call. Goldman Sachs expects Syngene to benefit significantly from the China+1 trend due to its end-to-end service capabilities. Despite short-term macro challenges in CY24, multiple catalysts are anticipated, including improvements in biotech funding, the ramp-up of manufacturing plants, and new contract wins, especially amid the anti-China sentiment.
Progress on the US Biosecure Act could also bring disproportionate benefits to the company, according to Goldman Sachs.
Shares of the company closed at Rs 694, down 1.01 percent on NSE on 24 April.
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