Syngene International Ltd. share price target

Revenue decreased by 12.29% to Rs. 291.3 Cr in Q4FY17 when compared to the previous quarter. Also it fell by 12.13% when compared with Q4FY16.

We cut FY18/19 EPS by 6% /4% to factor in fire incident and higher costs guidance (impacting margin by 2-3%), but maintain HOLD with a revised TP of Rs 500 at 24x FY19E EPS (vsRs. 520 earlier).

Global pharmaceutical players are facing structural issues from the impending patent cliff, shrinking product pipeline, rising R&D; costs and growing competition. At the one end, these companies are shrinking in size due to loss of blockbuster exclusivities while, at the other end, new product approvals by the USFDA are also on the rise. Hence, to maintain the structural balance and improve probability of success they are inclined to outsource a substantial part of the R&D; work. Similarly, the innovative/virtual companies that are extensively working on new...

Syngene's (SYNG) Q3FY17 revenue (up 18% YoY) was in line with estimates, aided by sales return.EBITDA margin was inline at 34%, impacted by higher staff costs on account of senior hiring. We believe the recent fire at a facility in Dec'16 could affect capacity for future growth (as it would take..

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ICICI Securities Ltd | Retail Equity Research Revenues grew 15.9% YoY to | 303 crore (I-direct estimate: | 326 crore) mainly due to strong growth in dedicated centres and discovery services, which was partially offset by slow down in Development and Manufacturing services EBITDA margins increased 376 bps to 34.9% YoY (I-direct estimate:...

We took Mr. M B Chinappa, CFO of Syngene, on a non-deal roadshow to Singapore, Hong Kong and Taiwan, arranging meetings with over 25 FIIs. Syngene manages to roll forward 90-95% of its existing business into the next year due to its steady business model and strong relationships with existing clients. Syngene has guided for revenue growth of >20% per annum until FY18, along with stable EBITDA and PAT margins. We expect it to achieve this guidance. We expect the company to continue commanding premium multiples, given its robust revenue growth (double the pace of industry growth), attractive margin profile (EBITDA...

Syngene has announced the establishment of a dedicated centre for Amgen, Inc. in Bangalore. This centre, called Syngene Amgen Research and Development Centre (SARC), will be Syngene’s fourth such exclusive R&D centre and the first for a biologics company. Syngene already operates dedicated R&D centres for Bristol-Myers Squibb (BMS), Abbott Nutrition (Abbott) and Baxter Inc. SARC will be staffed by a team of more than 100 Syngene scientists, working with Amgen researchers around the world on the discovery and development of innovative medicines.

Also, due to complexity of biologics and customer stickiness in biologic deals, we believe this deal will be more remunerative than the existing dedicated centres, going ahead.We expect sales, EBITDA and PAT to grow at a CAGR of 25.1%, 26.2% and 27.3% to| 2166 crore, | 720 crore and | 457 crore, respectively, over FY16-19E. We have introduced FY19 estimates. Accordingly, we arrive at our new target price of | 570 based on 25x FY19E EPS of | 22.8.

Syngene International ltd. (SIL) Limited is one of India's leading contract research company. SIL is founded in 1993 and a subsidiary of Biocon Ltd. Syngene is a leading custom research and manufacturing organization, which supports R&D; programs from lead generation to clinical supplies. The company's multi-disciplinary skills in integrated drug discovery and development include capabilities in medicinal chemistry, biology, toxicology, custom synthesis, process R&D;, cGMP manufacturing, formulation and analytical development. The company provides significant cost advantage to companies seeking to minimize their R&D; spends. The lower cost structure in Asia Pacific region helps in reducing R&D; spend by...

ICICI Securities Ltd | Retail Equity Research Revenues grew 17.5% YoY to | 274.5 crore (I-direct estimate: | 302.6 crore) mainly due to growth in the discovery services vertical and development and manufacturing group. Adjusting for the impact of sales return, growth would have been 22.5% EBITDA margins declined 120 bps to 32.3% YoY (I-direct estimate: 32.3%) owing to higher employee cost and other expenditure, which was partially offset by improvement in gross margins. EBITDA grew...