Syngene International Reports 6% Profit Growth in Q4, Announces ₹1.25 Dividend

Syngene International reports mixed Q4 results, with net profit up 6% despite revenue decline. CEO optimistic about US biotech sector recovery and company's resilience, guiding for high single-digit to low double-digit growth in FY25.

Trim Correspondents
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Syngene International Reports 6% Profit Growth in Q4, Announces ₹1.25 Dividend

Syngene International Reports 6% Profit Growth in Q4, Announces ₹1.25 Dividend

Syngene International Limited, a leading contract research organization, has reported its financial results for the fourth quarter (Q4) of the fiscal year 2024. The company's net profit for Q4 FY2024 increased by 6% year-on-year to ₹188.6 crores, despite an 8% decline in revenue from operations to ₹916.9 crore compared to the same period last year.

For the full fiscal year 2024, Syngene's total income grew by 9.66% to ₹3,579.2 crores, while the net profit increased by 9.82% to ₹510 crores. The earnings per share (EPS) for the year was ₹12.69, up 10.25% from the previous fiscal year. The company's revenue from operations for the full year grew by 9% to ₹3,489 crore, and profit after tax, before exceptional items, increased by 12% to ₹519 crore.

Syngene's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased by 0.95% to ₹317 crore in Q4 FY2024, with the margin jumping to 34.5% from 31.5% a year ago. The company's CEO, Jonathan Hunt, attributed the lower-than-expected fourth-quarter performance to reduced demand for research and development services within the US biotech sector due to a difficult funding environment. However, he expressed optimism about the recovery signs seen in the US biotech sector and the company's resilience, particularly in their biologics division.

The company's growth guidance for FY25 stands at high single-digit to low double-digit terms, compared to around 6% in FY24. The growth pace is expected to pick up in the second half of FY25, as US biotech firms have stepped up their fundraising efforts. Syngene plans to invest around ₹55 million in FY25, with half of the investment going towards research services and the rest towards automation and digitalization of manufacturing facilities.

Syngene International's Board of Directors has recommended a final dividend of ₹1.25 per share, a 150% increase compared to the previous year. The record date for the dividend payment is set as Friday, June 28, 2024, and the dividend will be paid within 30 days from the date of shareholders' approval.

Following the announcement of the mixed fourth-quarter results, Syngene International's stock price slipped over 3.60% on the BSE (Bombay Stock Exchange) on April 25, 2024. The company's shares were last trading on the BSE at ₹694.20, compared to the previous close of ₹701.20.

Why this matters:

Syngene International's CEO, Jonathan Hunt, remains optimistic about the company's future prospects, citing the recovery signs in the US biotech sector and the company's diversification efforts. The company plans to further expand its operations and research capabilities, including the operationalization of new Development Services and the completion of a biologics manufacturing facility acquisition. With a strong focus on innovation and strategic investments, Syngene International aims to maintain its position as a leading player in the contract research and manufacturing industry amid Q4 downturn, expecting strong revenue growth ahead.

Key Takeaways

  • Syngene's Q4 FY2024 net profit up 6% YoY despite 8% revenue decline
  • FY2024 total income grew 9.66% to ₹3,579.2 crores, net profit up 9.82%
  • Q4 EBITDA up 0.95% to ₹317 crore, margin jumped to 34.5% from 31.5%
  • FY25 growth guidance at high single-digit to low double-digit, plans ₹55m capex
  • Board recommends final dividend of ₹1.25 per share, 150% increase YoY