Syngene shares plunge after contract research firm trims revenue guidance

Syngene International shares tumbled on Wednesday after the contract research firm trimmed its revenue guidance for the second half of the current financial year. The stock of Syngene International, a subsidiary of biopharma company Biocon, fell by as much as Rs 58.7, or 7.5 per cent, to Rs 720.3 apiece on BSE. 

Syngene, an integrated research and development company, cut its revenue growth guidance to mid-teen levels from high teens in constant currency terms for the six-month period ending March 2024, citing a temporary slowdown in the US biotech funding.

After market hours on Tuesday, the company staged a strong quarterly performance with double-digit growth in the top line. Syngene reported a 14 per cent year-on-year jump in consolidated net profit to Rs 116.5 crore for the quarter ended September 30.

Its revenue grew 18 per cent to Rs 910 crore compared with the corresponding period a year ago, according to a regulatory filing.

The company said revenue growth in constant currency stood at 15 per cent for the quarter ended September.

Syngene reported Rs 254 crore in earnings before interest, taxes, depreciation and amortisation (EBITDA) for the quarter under review, up 17 per cent on a year-on-year basis. 

Its margin, a key measure of profitability, stood at 27.9 per cent for the quarter ended September 2023, as against 28.2 per cent for the quarter ended September 2022. 

EDITOR'S TAKE | Syngene's Q2 operational performance weak

Zee Business Managing Editor Anil Singhvi pointed out that Syngene International's revenue growth was strong but its operational performance was weak. 

He also found the contract research firm's growth guidance to be weak.

Syngene shares: Past performance

As of October 17, the Syngene International stock had risen 44.7 per cent in the past year, a period in which the headline Nifty index rose 14.4 per cent. 

What does Syngene International do?

Syngene International, an operationally-independent publicly listed subsidiary of Biocon, has more than 25 years of experience in novel molecule discovery, development and manufacturing services.

Catch latest stock market updates here. For all other news related to business, politics, tech, sports and auto, visit Zeebiz.com.