Syngene International, a prominent contract research and manufacturing firm, faced a significant downturn in its stock performance following the release of its fourth-quarter financial results for the fiscal year 2025. On April 24, 2025, shares plummeted over 10% during intraday trading, marking one of the worst losses in over five years. The company's stock hit an intra-day low of ₹650.05 on the National Stock Exchange, ultimately closing at ₹674.80, down 9.92% from the previous day. This decline comes amidst a backdrop of disappointing profit figures, which fell short of analysts' expectations.
For the fourth quarter ending March 31, 2025, Syngene reported a net profit of ₹183 crore, a decrease of 2.8% compared to ₹189 crore during the same period last year. This miss on profit expectations was compounded by a reported revenue of ₹1,018 crore, reflecting an 11% increase from ₹917 crore year-over-year, but still below the forecasted ₹1,048.8 crore. The company's EBITDA (earnings before interest, taxes, depreciation, and amortization) also fell short of projections, coming in at ₹344 crore, an 8.4% increase but below the expected ₹364.8 crore. Consequently, the EBITDA margin narrowed to 33.8%, down from 34.6% in the prior year, and below the anticipated 34.8%.
Peter Bains, Managing Director and CEO of Syngene International, acknowledged the challenges faced by the company in the past year. "The full-year results, led by reported revenue growth of 4%, are in line with our January guidance, reflecting a resilient performance in a challenging year. After a muted first half, driven by a sectoral downturn in US biotech funding, we are encouraged to see a return to growth in the second half of the year," Bains stated. He emphasized the acquisition of a state-of-the-art biologics manufacturing facility in the U.S. as a key highlight for the quarter, which he believes strengthens Syngene’s position in the burgeoning biologics CDMO sector.
Despite the disappointing results, the board of Syngene recommended a final dividend of ₹1.25 per share for the fiscal year 2024-25, subject to shareholder approval. This decision reflects the company's ongoing commitment to returning value to its investors, even amid financial setbacks. The dividend will be paid within 30 days following the approval by shareholders, with the record date set for June 27, 2025.
Market analysts have expressed mixed sentiments regarding Syngene's future. According to Bloomberg data, out of 11 analysts covering the stock, seven maintain a 'buy' rating, one suggests a 'hold,' and three recommend 'sell.' The average 12-month price target for Syngene shares is ₹844, indicating a potential upside of approximately 24% from current levels. However, the stock has seen a year-to-date decline of 20%, which contrasts sharply with the 2.6% gain in the benchmark Nifty50 index.
Looking ahead, Bains shared cautious optimism about the company's growth trajectory. "On an underlying basis for FY26, we expect revenue growth in the early teens, reflecting a broad-based growth across research, development, and manufacturing services," he explained. He also noted that while the global market dynamics remain uncertain, Syngene anticipates sustained business momentum driven by a growing pipeline in both small and large molecules, supported by new pilot programs and the conversion of existing pilots in discovery services.
Syngene International, incorporated in 1993 and listed on both the NSE and BSE, has established itself as a leader in providing integrated discovery, development, and manufacturing services across various sectors, including pharmaceuticals, biotechnology, animal healthcare, consumer goods, and agrochemicals. With a talent pool of over 5,600 scientists, the company prides itself on delivering innovative solutions that benefit human and animal health.
As the company navigates these turbulent waters, investors and analysts alike will be closely monitoring Syngene's ability to adapt and grow in an ever-evolving market landscape. The recent financial results serve as a reminder of the challenges inherent in the biotech and pharmaceutical sectors, particularly in light of fluctuating funding and market conditions.
In summary, while Syngene International's recent earnings report has raised concerns among investors, the company's strategic initiatives and commitment to innovation may pave the way for recovery and growth in the coming fiscal year. The market will be watching closely to see if the company can turn the tide and regain investor confidence.
