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Business News/ Markets / Stock Markets/  Improved US biotech funding to aid FY25 growth, expects Jonathan Hunt, MD & CEO, Syngene International
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Improved US biotech funding to aid FY25 growth, expects Jonathan Hunt, MD & CEO, Syngene International

Stock Market Today: Syngene International reported 6% year-on-year rise in net profit during Q4 while revenues declined 8%. As funding challenges from US biotech leading to decreased demand for R&D services, has impacted second half FY24, improved funding for US biotech may aid FY25 growth

Syngene International reported 6% year-on-year rise in net profit during Q4 while revenues declined 8%. Premium
Syngene International reported 6% year-on-year rise in net profit during Q4 while revenues declined 8%.

Syngene International  share price have remained volatile in the recent past. The concerns on challenging funding conditions for US biotech that led to decreased demand for R&D services have addded to the volatility in Biocon Research arm Syngene International share prices. 

Jonathan Hunt, Managing Director and Chief Executive Officer, Syngene International Limited, 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"

Syngene International saw reported revenue from operations for the fourth quarter decline 8% year-on-year to Rs. 917 crores. Profit after tax for the quarter increased 6% year-on-year to 189 crores.

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The other business segments apart from Discovery services and dedicated centers,  as development business and manufacturing services however supported the segment.

While second half may have seen some slowdown for Synege, for the year (FY24) Syngene reported  revenue from operations at Rs. 3,489 Crore increasing  9% to  over FY23 resulting in profit after tax and before exceptional items rising 12% to Rs. 519 Crore.

Higher Growth guidance-

The growth guidance by Syngene during FY25 stand at high single digit to low double digit terms compared to around 6% in FY24 , highlighted Hunt. 

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Growth pace to pick up from second half of FY25. The US Biotech majors had stepped up their efforts and fund raising and the January-March quarter has seen good amount of fund being raised by US biotech firms in FY24. Historically it has been observed that after raising funds, investments start rising in next six months.  Hence during second half may actually witness better rise in investments.

The successful acquisition of the biologics manufacturing plant from Stelis Biopharma also was completed in the Manufacturing Services sector. The plant's repurposing is proceeding according to plan, with the second half of 2024 predicted to see the completion of facility upgrades and qualification.

Benefits from China rotation

Indian pharmaceutical industry as a whole has seen a significant rise in enquiries, site visits etc from global pharmaceutical companies that are looking at reducing their dependence on China.  Hunt said that the green shoots are visible and over time benefits will be reaped in terms of growth by the Industry and Syngene International from the China rotation that has started to take place.

Dividend rises - The dividend announced by Syngene International has risen significant 150% from 0.50 a share at the end of FY23 to 1.25 per share, of face value of 10, at the end of FY24. Hunt said that the investors have been rewarded with higher dividend during FY24. The company intends to award shareholders with higher dividend though the same will be reviewed on yearly basis.

Capex-

 Syngene International that invested around $55 million in FY24 will be investing $60 million in FY25 too. Almost half of this will be invested in the research services, and rest in automation, digitalisation of manufacturing facilities to aid growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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ABOUT THE AUTHOR
Ujjval Jauhari
Ujjval Jauhari is a deputy editor at Mint, with over a decade of experience in newspapers and digital news platforms. He is skilled in storytelling, reporting, analysing and writing about stocks, investment ideas, markets, corporates and more. He is based in New Delhi.
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Published: 25 Apr 2024, 01:48 PM IST
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