Syngene International Lowers FY25 Revenue Guidance Amid Market Challenges

Syngene International Ltd. has lowered its fiscal 2025 revenue growth guidance due to unexpected delays in demand recovery. Initially anticipated in the second half of the year, the recovery was postponed by eight to 12 weeks, prompting the company to project single-digit revenue growth, with flat profit for the full year. However, the Ebitda guidance remains steady, reflecting resilience in the company's operational strategy.

Syngene International's consolidated net profit rose 18% in the third quarter of the current financial year, missing analysts' estimates.

The contract research and manufacturing services firm posted a profit of Rs 131 crore in the quarter ended Dec. 31 in comparison to Rs 112 crore in the year-ago period, according to an exchange filing on Thursday. Analysts tracked by Bloomberg had estimated a net profit of Rs 144 crore.

The company was expecting high-single digit to low double-digit growth in FY25.

The US biotech funding environment faced further delays in the third quarter, affecting market stabilisation and necessitating the revision of revenue expectations. Despite this, Syngene remains committed to its long-term strategy. The company plans to invest heavily in capacity and capabilities, leveraging the 'China Plus One' trend. The completion of unit 3, scheduled for April, is expected to play a critical role in driving future growth.

Capital expenditure remains on track, with Syngene aiming to meet its USD 60 million target by year-end. Although biologics manufacturing utilisation has been a concern, particularly with the newly acquired unit not yet operational, the company remains optimistic about margin recovery in the fourth quarter, targeting levels close to FY24.

As Syngene navigates these challenges, its focus on strategic investments and capacity-building is expected to position the company for long-term growth, despite short-term hurdles.