Syngene Q1 Results Review - Healthy Guidance Already Priced In: Yes Securities
Factoring ~$45 million of Zoetis sales in FY24 leads us to believe core research business is not growing more than 12-13%.
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Yes Securities Report
Syngene International Ltd.'s Q1 FY24 benefited from strong traction in core business led by development and manufacturing along with contribution from Zoetis supplies and healthy forex tailwind YoY.
Margin came in at 28% (excluding hedging loss Rs 155 million), tad below our 29% estimate as mix skew towards development/manufacturing would have led to higher overheads.
Syngene International's management reiterated FY24 guidance and hinted at some mix change (presumably more of development and biologics manufacturing).
Factoring ~$45 million of Zoetis sales in FY24 leads us to believe core research business is not growing more than 12-13% over corresponding ex-Zoetis base of FY23.
Moreover, given that manufacturing share is likely to increase (biologics plus Mangalore active pharma ingredient), cost overheads would preclude operating leverage benefits in the immediate term which makes us cautious.
Given that numbers especially margin was largely in line, do not see any need to tweak estimates in a meaningful way.
Retain 'Sell' with unchanged target price Rs 560 as operating leverage is still unlikely in the current fiscal.
Click on the attachment to read the full report:
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.