Syngene International slides after Q2 FY22 PAT tumbles 21% to Rs 67 cr

Syngene International declined 3.28% to Rs 586.55 after the company's consolidated net profit (after exceptional items) dropped 20.68% to Rs 66.70 crore on a 17.43% surge in revenue from operations to Rs 610.20 crore in Q2 FY22 over Q2 FY21.

On a consolidated basis, EBITDA climbed 12% to Rs 190.30 crore in Q2 September 2021 as compared to Rs 169.50 crore in Q2 September 2020. EBITDA margin stood at 31% during the quarter as compared to 32% during Q2 September 2020. Profit margin was at 15% during the quarter as compared to 16% during Q2 September 2020.

The second quarter results reflected positive performances from all divisions. In Discovery Services, there was positive demand for newer services like Protein Degradation Technology (PROTACS) and peptide synthesis, complemented by key client markets in the US and Europe beginning the process of returning to normal operations. Development Services also experienced a positive uptick in enquiries as clients restarted activities following a lull during the pandemic due to the impact of the virus on trial viability. In biologics manufacturing, against a backdrop of the expansion of microbial manufacturing and capacity building in mammalian manufacturing, the company also saw its client base expand during the quarter. Manufacturing of small molecules at Mangalore remains on track to achieve USFDA approval within two years.

Commenting on the results, Jonathan Hunt, the managing director (MD) and chief executive officer (CEO) of Syngene International, said, "The second quarter was characterized by positive performances in all divisions. In Discovery Services, we saw excellent client demand, particularly within the emerging biopharma segment, as well as further expansion of our relationships with existing clients and our long-term partners in the dedicated research centers. During the quarter, we continued to manufacture remdesivir for COVID-19, under a voluntary licensing agreement from Gilead."

"The quarter also saw continued investment in new technologies and the successful implementation of several digitization and automation projects across our operations. These investments play an important role in enhancing productivity, reducing the impact of human error and improving quality systems across our business. We are pleased to have delivered a strong performance in the first half of the year. Careful management of costs, coupled with a robust business continuity plan, enabled us to continue to build capability and capacity to meet the growing requirements of our clients. Notwithstanding the continuing uncertainty of the pandemic, we believe that we are well- positioned to deliver our guidance of mid-teens revenue growth for the full year."

Syngene International is an integrated research, development and manufacturing services company serving the global pharmaceutical, biotechnology, nutrition, animal health, consumer goods and specialty chemical sectors.

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