Shares of the listed contract research and manufacturing services arm of Biocon gained 6.6 percent on Thursday’s intraday trades to reach a fresh 52-week high of ₹ 813.00 apiece on the National Stock Exchange (NSE) after the company reported robust results for the June quarter (Q1) of FY 2023-24.
Syngene International, Biocon’s subsidiary and India’s first Contract Research Organization (CRO) offers end-to-end drug discovery, development, and manufacturing services on a single platform (CRAMS).
The company reported a 26.39 percent increase in its consolidated net profit for the June quarter (Q1FY24) at ₹ 808.10, a compared to ₹ 644.50 crores in the corresponding quarter last year. Its revenue grew by 25.38 percent to ₹ 808.10 crores as compared to ₹ 644.50 crores in the same quarter last year.
Three important events took place in the April to June quarter. Syngene International announced the acquisition of a biologics manufacturing facility in Bangalore from Stelis Biopharma; the company received regulatory approval for the commercial manufacturing plant in Mangalore from the US Food and Drug Administration (USFDA) and it acquired additional land in Hyderabad to support further growth.
Jonathan Hunt, Managing Director and Chief Executive Officer, Syngene International, said “First quarter performance was strong, led by development and manufacturing services and well supported by our research divisions: Discovery Services and the Dedicated Centers.”
Shares of the company settled at ₹ 810.00 apiece on Thursday. In the past year, the company’s share price increased by 170 percent from ₹ 573.10 levels. An investment of ₹ 1 lakh in the company’s shares one year ago would be worth ₹ 2.70 lakhs today!
With a market capitalization of ₹ 30,436 crores, Syngene International is a mid-cap company. It has a low return on equity of 13.43 percent and an ideal debt-to-equity ratio of 0.23. Its shares were trading at a price-to-earnings ratio (P/E) of 63.42, which is higher than the industry P/E of 30.91, indicating that the stock might be overvalued as compared to its peers.
The company’s promoters hold a 54.80 percent stake in it, followed by foreign institutions with 23.19 percent, retail investors with 12.58 percent, mutual funds with 8.58 percent and other domestic institutions with 0.85 percent.
Written by Simran Bafna
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