In This Article:
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Revenue from Operations: INR944 crores, up 11% year-on-year.
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Operating EBITDA: INR284 crores, up 23% year-on-year.
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Operating EBITDA Margin: 30.1%, increased by 300 basis points.
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Profit After Tax: INR131 crores, up 18% year-on-year.
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Material Costs: Declined from 27.8% to 25.2% of revenue.
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Staff Costs: Increased by 14% year-on-year.
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Other Operating Costs: Increased by 18% year-on-year.
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Hedge Gain: INR2 crores compared to a hedge loss of INR12.4 crores in the previous year.
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CapEx: USD34 million invested in the first nine months.
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Net Cash: INR838 crores as of December 2024.
Release Date: January 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Syngene International Ltd (BOM:539268) reported a revenue increase of 11% year-on-year for the third quarter, indicating a return to growth.
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Operating EBITDA rose by 23% to INR284 crores, with margins improving by 300 basis points to 30.1%.
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The company benefited from a favorable exchange rate, contributing to an 8% increase in revenue from operations in constant currency terms.
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Discovery services showed growth, with successful conversions of pilot projects into long-term contracts.
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Syngene maintained a strong balance sheet with a net cash position of INR838 crores as of December 2024, supporting future investments and growth.
Negative Points
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The US biotech funding environment stabilized slower than anticipated, impacting the timing of revenue growth.
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Revenue guidance was revised downwards from high single-digit to mid-single-digit growth, reflecting a delay in market recovery.
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Staff costs increased by 14% year-on-year due to salary increments and recruitment, impacting overall profitability.
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Operating costs rose by 18% year-on-year, driven by investments in digital initiatives and maintenance of expanded facilities.
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The company faced a decline in revenue and EBITDA in the first half of the year, offsetting the recovery seen in the third quarter.
Q & A Highlights
Q: Can you explain the revenue guidance cut and the impact of the 8 to 12-week delay on expectations? A: Jonathan Hunt, CEO, explained that the delay in stabilization of the US biotech funding environment affected their initial guidance. The market stabilized later than anticipated, impacting revenue growth. The company is now back to growth, with an 11% increase in Q3, but the external environment's stabilization took longer than expected.
Q: Is there any update on the new biologics facility and its customer acquisition? A: Jonathan Hunt clarified that while the new facility is not yet operational, it was acquired to address capacity constraints due to growth in biologics. The facility is expected to be ready by April, after which they will begin the selling cycle. The facility's lifecycle is expected to be 20-30 years.