Syngene reported revenue growth of 2% YoY vs estimated decline of 2.5% YoY. Business was driven by underlying revenue growth from CRO which offset the expected inventory correction in biologics manufacturing (Q2 saw a heightened impact after a relative low burden in Q1).
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Yes Securities Report
Syngene International Ltd. is building capabilities in peptides and augmenting capacity in biologics as it commences operations at Unit III in Bengaluru. US facility at Bayview is likely to be commercialized in H2 and we expect ~20% utilization in FY27 adding to overall growth next fiscal.
Management did not upgrade FY26 guidance which potentially implies no revenue acceleration in H2; in this context FY27 growth guidance assumes significance as we build in high teens improvement after three lacklustre years.
Notwithstanding a wash-out year, we reckon downgrades may come to a halt which would preclude large downside; hence upgrade to Neutral based on unchanged 45x FY27E EPS and a revised target price Rs 600.
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