Syngene International Reports Mixed Q4 Results: Net Profit Up, Revenue Down

Syngene International reports mixed Q4 results, with lower revenue but improved profitability, highlighting resilience in the face of biotech industry challenges. The company plans investments and acquisitions to drive future growth.

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Dil Bar Irshad
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Syngene International Reports Mixed Q4 Results: Net Profit Up, Revenue Down

Syngene International Reports Mixed Q4 Results: Net Profit Up, Revenue Down

Syngene International, a leading contract research and manufacturing services company, announced its financial results for the fourth quarter ended March 31, 2024.

The company reported a 5.5% increase in net profit to ₹188.6 crore compared to the same period last year. However, revenue decreased by 7.8% to ₹916.9 crore during the quarter.

Despite the revenue decline, Syngene's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) rose by 0.9% to ₹316.9 crore, with the EBITDA margin improving to 34.6% from 31.6% in the previous year. The company attributed the revenue decrease to lower sales in the dedicated R&D services and the biologics manufacturing businesses, which was partially offset by growth in the discovery services and the dedicated R&D services businesses.

For the full year ending March 31, 2024, Syngene's revenue from operations was up 9% to ₹3,489 crore, and profit after tax, before exceptional items, increased by 12% to ₹519 crore. Jonathan Hunt, the company's managing director and CEO, expressed confidence in Syngene's long-term performance despite the lower-than-expected fourth-quarter results.

"The fourth quarter performance was lower than expected due to reduced demand for research and development services within the US biotech sector, which is experiencing a difficult funding environment," Hunt said.

Why this matters: Syngene International's mixed Q4 results reflect the challenges faced by the biotech industry, particularly in the US, due to a tough funding environment. The company's ability to maintain profitability and improve margins despite revenue pressures highlights its resilience and adaptability in navigating market uncertainties.

Looking ahead, Syngene plans to invest ₹55 million in FY25, with a focus on research services and automation/digitalization of manufacturing facilities. The company also completed the acquisition of a biologics manufacturing plant from Stelis Biopharma and expects to benefit from the China rotation in the pharmaceutical industry. Syngene's Board of Directors has recommended a final dividend of ₹1.25 per share, a 150% increase compared to the previous year.

Key Takeaways

  • Syngene Q4 FY24 net profit up 5.5% to ₹188.6 cr, revenue down 7.8% to ₹916.9 cr
  • EBITDA rose 0.9% to ₹316.9 cr, EBITDA margin improved to 34.6% from 31.6%
  • FY24 revenue up 9% to ₹3,489 cr, profit up 12% to ₹519 cr
  • Challenges in US biotech funding impacted Q4 performance, but long-term outlook remains positive
  • Syngene to invest ₹55 million in FY25, final dividend up 150% to ₹1.25 per share