Syngene International Ltd. share price target

Syngene is expected to post stronger growth from H2FY18 given (1) most of the business impacted by fire incident in Dec'16 will be generating revenue from Q3/ Q4FY18, (2) addition of large scale commercial manufacturing of intermediates and API's for innovator companies

Q2FY18 revenue grew 11% YoY (14% in cc terms), as growth is accelerating after the fire incident (6% YoY in Q1). EBITDA margin was healthy at 33.9% despite 22% YoY growth in staff cost and 14% YoY growth in other expenses. Revenue grew 12% YoY in cc terms in H1FY18.

ICICI Securities Ltd | Retail Equity Research Revenues grew 11% YoY to | 335 crore (I-direct estimate: | 320 crore) due to strong performance in development & manufacturing services and sustained growth in dedicated R&D; centres Gross margins improved 204 bps YoY to 76.1% but EBITDA margins declined 99 bps to 33.9% YoY (I-direct estimate: 33%) mainly due to higher employee expenses. EBITDA in value terms grew 7.5% YoY to | 114 crore (I-direct estimate: | 106 crore)...

Q1FY18 revenue grew 6% YoY (10% in cc terms) vs. 11% decline in Q4FY18 on recovery of 11% of sales which was affected by fire incident along with new capacity additions. Despite 16% YoY growth in staff cost, EBITDA margin was steady at 33% led by lower other expenses (due to hedging gains).

Syngene's net sales grew by 6% yoy to Rs 291cr and PAT grew by 3.7% yoy to Rs 62cr. EBITDA grew by 8.1% to Rs 96cr due to margin improvement led by superior business mix. EBITDA margin improved to 33% in 1QFY18 from 32.3% in 1QFY17.. We had expected PAT of Rs 61cr on the topline of Rs 296cr hence the result has met our expectations. What ..

SIL's revenues grew at ~24% CAGR in FY12-17 to | 1201 crore due to new client addition on a regular basis and scaled up revenues from existing clients led by integrated service offerings, high data integrity ethos and continuous endeavour to move up the value chain. The capabilities have been vindicated by proven customer stickiness as eight of the top 10 global pharma companies have been availing the services for the last five years. The proposed foray in contract manufacturing (CMO) services will further strengthen its service offering to clients. The...

Unique investment opportunity in drug research business: While almost all Indian pharma companies are in generic drugs business, Syngene supports its clients to invent new drugs. It has 8 of the top 10 global pharma companies as its clients and also has long term contracts with some big pharma companies. In our view Syngene provides a uni..

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...