The share price of Syngene International, the research subsidiary of pharma giant Biocon, rallied 6 percent on October 19 after strong earnings performance in the September quarter.
The stock closed at Rs 589.25 on the NSE, its best closing since September 2, up 6.3 percent.
Syngene International reported a 53 percent year-on-year growth in consolidated profit at Rs 102 crore for the quarter ended September 30, 2022, backed by strong topline and operating income.
The low base in the year-ago period also supported bottomline as there was an exceptional loss in Q2FY22 related to an exceptional downward adjustment of Rs 25 crore on account of the government's decision to cap the services export incentive scheme (SEIS) for research and development services at Rs 5 crore for the financial year 2020.
Before exceptional item, the profit growth was 11 percent YoY.
Consolidated revenue grew by 26 percent to Rs 768.1 crore with positive performances across all divisions.
Discovery services experienced sustained demand and development services benefitted from repeat orders by existing clients, especially in areas of drug substance development and clinical supplies, the company said in its BSE filing.
In manufacturing services, as part of the long-term biologics manufacturing agreement signed with animal health company Zoetis in the first quarter, it completed the process performance qualification batches at a commercial scale, the company said.
The commercial manufacturing of the drug substance for Librela, a veterinary medicine, is likely to begin in the fourth quarter of FY23, subject to successful completion of the required audits, it added.
At the operating level, EBITDA (earnings before interest, tax, depreciation and amortisation) increased by 22 percent to Rs 216.5 crore but margin dropped 90 bps to 28.2 percent compared to the year-ago period.
In the half year ended September FY23, Syngene clocked 22 percent YoY growth in profit at Rs 176 crore on revenue of Rs 1,413 crore that increased by 17 percent compared to the same period last year. EBITDA in the first half of FY23 grew by 14 percent to Rs 420 crore from the year-ago period.
"With a strong first half of the year behind us, we are on track to achieve our guidance, including the upgraded revenue growth target announced in July," Jonathan Hunt, Managing Director and Chief Executive Officer said.
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