Capitaline

Results 25-Apr-24

Analysis

Syngene International

Net sales down 7.79%

For quarter ended March 2024, consolidated Net sales (including other operating income) of Syngene International has declined 7.79% to Rs 916.9 crore compared to quarter ended March 2023. Operating profit margin has jumped from 31.59% to 34.56%, leading to 0.89% rise in operating profit to Rs 316.90 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 26.78% to 19.42%. Employee cost increased from 24.83% to 25.60%. Other expenses rose from 15.56% to 19.22%.

Other income fell 29.39% to Rs 16.1 crore. PBIDT fell 1.16% to Rs 333 crore. Provision for interest rose 24.04% to Rs 12.9 crore. Loan funds declined from Rs 815.20 crore as of 31 March 2023 to Rs 555.20 crore as of 31 March 2024. Inventories declined from Rs 332.80 crore as of 31 March 2023 to Rs 238.50 crore as of 31 March 2024. Sundry debtors were lower at Rs 441.60 crore as of 31 March 2024 compared to Rs 529.30 crore as of 31 March 2023. Cash and bank balance rose to Rs 563.50 crore as of 31 March 2024 from Rs 531.70 crore as of 31 March 2023. Investments declined from Rs 918.50 crore as of 31 March 2023 to Rs 547.90 crore as of 31 March 2024.

PBDT fell 1.96% to Rs 320.1 crore. Provision for depreciation rose 16.21% to Rs 111.1 crore. Fixed assets increased to Rs 3,658.60 crore as of 31 March 2024 from Rs 2,825.30 crore as of 31 March 2023. Intangible assets increased from Rs 18.50 crore to Rs 29.50 crore.

Profit before tax down 9.48% to Rs 209.00 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 20.4 crore, compared to Rs 52.2 crore. Effective tax rate was 9.76% compared to 22.61%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 5.54% to Rs 188.60 crore.

Equity capital increased from Rs 401.40 crore as of 31 March 2023 to Rs 402.00 crore as of 31 March 2024. Per share face Value remained same at Rs 10.00.

Promoters’ stake was 54.79% as of 31 March 2024 ,compared to 54.88% as of 31 March 2023 .

Full year results analysis.

Net sales (including other operating income) of Syngene International has increased 9.26% to Rs 3488.6 crore. Operating profit margin has declined from 29.26% to 29.08%, leading to 8.56% rise in operating profit to Rs 1,014.40 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 27.89% to 25.45%. Employee cost decreased from 26.02% to 25.89%. Other expenses rose from 17.21% to 19.09%.

Other income rose 27.79% to Rs 90.6 crore. PBIDT rose 9.92% to Rs 1105 crore. Provision for interest rose 4.42% to Rs 47.2 crore. Loan funds declined from Rs 815.20 crore as of 31 March 2023 to Rs 555.20 crore as of 31 March 2024. Inventories declined from Rs 332.80 crore as of 31 March 2023 to Rs 238.50 crore as of 31 March 2024. Sundry debtors were lower at Rs 441.60 crore as of 31 March 2024 compared to Rs 529.30 crore as of 31 March 2023. Cash and bank balance rose to Rs 563.50 crore as of 31 March 2024 from Rs 531.70 crore as of 31 March 2023. Investments declined from Rs 918.50 crore as of 31 March 2023 to Rs 547.90 crore as of 31 March 2024.

PBDT rose 10.18% to Rs 1057.8 crore. Provision for depreciation rose 16.21% to Rs 425.9 crore. Fixed assets increased to Rs 3,658.60 crore as of 31 March 2024 from Rs 2,825.30 crore as of 31 March 2023. Intangible assets increased from Rs 18.50 crore to Rs 29.50 crore.

Profit before tax grew 6.45% to Rs 631.90 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 110.8 crore, compared to Rs 129.2 crore. Effective tax rate was 17.85% compared to 21.77%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 9.82% to Rs 510.00 crore.

Equity capital increased from Rs 401.40 crore as of 31 March 2023 to Rs 402.00 crore as of 31 March 2024. Per share face Value remained same at Rs 10.00.

Promoters’ stake was 54.79% as of 31 March 2024 ,compared to 54.88% as of 31 March 2023 .

Cash flow from operating activities increased to Rs 1,042.10 crore for year ended March 2024 from Rs 823.50 crore for year ended March 2023. Cash flow used in acquiring fixed assets during the year ended March 2024 stood at Rs 510.80 crore, compared to Rs 518.30 crore during the year ended March 2023.

Business Highlights

The board recommended a final dividend of Re 1.25 per Equity Share of Rs 10 for FY24. Record date is fixed as Friday, June 28, 2024 for payment of dividend.

In Q4 FY24, in Development Services, a new capability for purifying and separating chiral compounds and HPAPIs (Highly Potent Active Pharmaceutical Ingredients) was operationalized. HPAPIs are typically used in the treatment of serious diseases such as cancer where precise dosing is crucial.

Management Comments :
Jonathan Hunt, Managing Director and Chief Executive Officer, Syngene International, said, “While the fourth quarter performance came in lower than expected, the underlying driver - reduced demand for research and development services within US biotech stemming from a difficult funding environment - is well understood and already showing positive signs of recovery. Despite the business environment, we delivered growth during the year. This resilience is the result of our broad operating span and the investments made to establish our development and manufacturing divisions with biologics, in particular, delivering a strong performance throughout the year. I’m encouraged by the recent step up in new funding into US biotech and expect this to drive a recovery in demand for research and development services translating into revenue growth in the latter part of the year. Looking ahead, we expect revenue growth in fiscal year 2025 to be in the range of high single digits to low double digits with momentum building up during the year. We expect the EBITDA margin to be similar to the level delivered in fiscal year 2024 and PAT growth in single digits. The long-term indicators for the sector are positive and I am confident that we will continue to perform well in the long term.”

Sibaji Biswas, Chief Financial Officer and Executive Director, Syngene International said, “We had a strong start to the year which moderated in the third and fourth quarters resulting in a slower second half of the fiscal year. We continued to manage costs proactively to deliver consistent operating leverage and maintain EBITDA margin around the expected level. Our net cashflow generated from operating activities for the year was strong at Rs 1,042 Crores, which fully funded the capex and the acquisition of the biologics manufacturing plant. For fiscal year 2024, the Board of Directors has recommended a final dividend of Rs.1.25 per share, an increase of 150% over last year’s core dividend of 50 paise per share, subject to shareholders approval. As demand picks up in the year ahead, we will continue to strategically invest in areas that strengthen our position as a leading integrated provider of research, development and manufacturing services.”

Syngene International : Consolidated Results

	Quarter ended			Year ended
Particulars	202403	202303	Var.(%)	202403	202303	Var.(%)
Net Sales (including other operating income)	916.90	994.40	-7.79	3,488.60	3,192.90	9.26
OPM (%)	34.56	31.59	298 bps	29.08	29.26	-19 bps
OP	316.90	314.10	0.89	1,014.40	934.40	8.56
Other Inc.	16.10	22.80	-29.39	90.60	70.90	27.79
PBIDT	333.00	336.90	-1.16	1,105.00	1,005.30	9.92
Interest	12.90	10.40	24.04	47.20	45.20	4.42
PBDT	320.10	326.50	-1.96	1,057.80	960.10	10.18
Depreciation	111.1	95.6	16.21	425.9	366.5	16.21
PBT	209.00	230.90	-9.48	631.9	593.6	6.45
Share of Profit/(Loss) from Associates	0	0	-	0	0	-
PBT before EO	209	230.9	-9.48	631.9	593.6	6.45
EO Income	0	0	-	-11.1	0	-
PBT after EO	209	230.9	-9.48	620.8	593.6	4.58
Taxation	20.4	52.2	-60.92	110.8	129.2	-14.24
PAT	188.6	178.7	5.54	510	464.4	9.82
Minority Interest (MI)	0	0	-	0	0	-
Net profit	188.6	178.7	5.54	510	464.4	9.82
P/(L) from discontinued operations net of tax	0	0	-	0	0	-
Net profit after discontinued operations	188.6	178.7	5.54	510	464.4	9.82
EPS (Rs)*	4.69	4.45	5.54	12.91	11.55	11.78

* EPS is on current equity of Rs 402.02 crore, Face value of Rs 10, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
EO : Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database

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