Syngene reports full year revenue from operations up 19 per cent to Rs 2,604 crores

Syngene International recently announced its fourth-quarter and full-year results. The company reported revenue from operations up 15 per cent to Rs 758 crores for the fourth quarter and up 19 per cent to Rs 2,604 crores for the full year ending 31st March, 2022. Profit After Tax (PAT) for the quarter, before accounting for exceptional items, was up seven per cent year-on-year to Rs 148 crores; PAT for the full year was up 10 per cent to Rs 421 crores, a company statement said.

It also noted that the fourth-quarter growth was driven by solid delivery across all divisions. Development Services had a particularly strong quarter as it caught up on projects postponed due to supply chain delays and other COVID-related disruption, in addition to planned work.

Phase-III of the expansion plan at the Hyderabad research facility was completed during the quarter. The company commissioned the first phase of the facility in February 2020 and phase-II was completed in November 2021. With the completion of phase-III, the facility now accommodates approximately 600 scientists and further expansion is planned in the year ahead, the statement added.

The research-based divisions, Discovery Services and the Dedicated Centres have delivered sustained growth throughout the year. SynVent, Syngene’s Integrated Drug Discovery (IDD) platform, continued to expand business from the existing clients and attract new clients, particularly from the emerging biopharma segment. It made a positive contribution to Discovery Services during the year as the number of IDD projects increased by ~40 per cent compared to the previous year, it stated.

The company signed an extension of the long-standing, multi-discipline research collaboration with Amgen to the end of 2026. In addition to operating the existing Syngene Amgen R&D centre under the new contract, the company will also build and operate a dedicated laboratory to accelerate the scale-up of small molecule projects, as per the statement.

In addition, it said that the focus on the Development and Manufacturing businesses included expanding the biopharma manufacturing capacity by commissioning a cGMP microbial facility and expanding the mammalian cell manufacturing facility. In small molecule development services, the oligonucleotide and highly potent API capabilities were both extended and plans are on track for the Mangalore manufacturing plant to achieve a regulatory approval, thus opening it up to a broader scope of projects.

Throughout the year, Syngene worked with clients on diagnostics, treatments and vaccines related to the corona virus. The company manufactured Remdesivir under a voluntary licence from Gilead. This manufacturing will continue for as long as the pandemic persists, the statement informed.

Overall revenue from operations for FY23 is expected to grow in the mid-teens. In light of the demand environment for CRO and CDMO services, the company expects to step up investments in new scientific capabilities, IT/digitisation and commercial activities. This step up in investment, along with resumption of travel and other business activities post-pandemic in an inflationary environment, is likely to put pressure on margins during the course of the year. In aggregate, the company expects to deliver an EBITDA margin around 30 per cent, according to the statement.

It also mentioned that with the SEZ tax benefit for key operating units reducing this year and in the coming years, the company expects the effective tax rate to increase by 200 to 300 basis points in FY23, creating some dilution in the PAT margin, resulting in a single digit PAT growth rate for the full year.

As Syngene comes out of the pandemic period with a strong financial performance, the Board of Directors has recommended a dividend of 50 paisa per share for the year. The dividend of 50 paisa per share and special additional dividend of 50 paisa per share will be subject to shareholders’ approval at the Annual General Meeting of the company, concluded the statement.