Q4FY21 Result Update - Syngene International - ICICI Direct

FY21 revenues grew 8.6% YoY to Rs. 2184 crore driven by steady growth across all divisions. Adjusting for loss of export incentives, revenues grew 12% in FY21. EBITDA margins remained flat YoY at 30.8% with better gross margins being offset by higher employee cost amid higher headcount. EBITDA grew 8.7% YoY to Rs. 672 crore. Adjusted PAT grew 4.4% YoY to Rs. 382 crore. Delta vis-a-vis EBITDA was due to higher depreciation and lower other income partially offset by lower tax rate.

Valuation & Outlook

A key notable in Q4 was extension of Syngene's research collaboration with BMS till 2030, which will lead to 40% incremental scientists (currently ~550) and an additional 50,000 sq ft dedicated lab space for BMS. For FY22, the management envisions mid-teen revenue growth on the back of continuous client additions, an extension of existing contracts, increasing manufacturing and biological contributions whereas bottomline growth to be in single-digit amid incremental opex and higher depreciation. Additionally, capex outlay for FY22 has been increased to Rs. 750-900 crore, likely on the back of BMS extension along with orderbook visibility, which will be a significant determinant of improvement in return ratios going ahead. With elite client additions like Amgen, Zoetis, Herbalife, GSK, etc, and multiple year extension of BMS, Baxter contracts, the company remains well poised to capture opportunities in the global CRO space. We remain positive on the company and maintain BUY despite the recent run up in the stock and arrive at a target price of Rs. 700 (unchanged) based on ~45x FY23 EPS of Rs. 15.5.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Syngene_Q4FY21.pdf

Shares of Syngene International Ltd was last trading in BSE at Rs.610.85 as compared to the previous close of Rs. 603. The total number of shares traded during the day was 34729 in over 1507 trades.

The stock hit an intraday high of Rs. 617.15 and intraday low of 595. The net turnover during the day was Rs. 21135397.

Source : Equity Bulls

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