Syngene International Ltd., incorporated in the year 1993, is a Mid Cap company (having a market cap of Rs 25160.00 Crore) operating in Pharmaceuticals sector.
Financials
For the quarter ended 30-06-2021, the company has reported a Consolidated Total Income of Rs 606.80 Crore, down -10.37 % from last quarter Total Income of Rs 677.00 Crore and up 38.89 % from last year same quarter Total Income of Rs 436.90 Crore. Company reported net profit after tax of Rs 77.30 Crore in latest quarter.
Investment Rationale
After an outsized Remdesivir sales boost in Q1 and no change to 15% revenue growth guidance in FY22, rest of the fiscal translates into just 8‐9% yoy growth. Also 20% capacity utilization of Mangalore facility in 2 years results in 2% annual revenue boost in FY22/23. Hence, the brokerage views absolute contribution of Mangalore API facility as insignificant given the base in FY23. Another potential catalyst in the form of API supply for Alberio is also baked in the guidance and we believe any optimism on API supplies should be tempered given the limited volume opportunity due to small patient population. It assigns low probability on any revenue surprise for rest of the year which leaves little room for further rerating. Introduce FY24 forecast and bake in 23% growth over FY23 (vs 14% cagr over FY20‐23) as FDA/EMA approvals would drive Mangalore utilization. It rolls over target 27x PE to FY24 but retain SELL with revised TP Rs515 (Rs400 earlier).
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