Syngene International Q1 Review - Remdesivir Hit Operations, Capacity Expansion Continues: Dolat Capital
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Dolat Capital Report
Syngene International Ltd. reported an in-line Q1 on the earnings front at Rs 773 million despite a miss on the margins (25% Ebitda margins versus our estimate of 29%).
Topline growth of 41% YoY was driven by one-time contribution of Remdesivir (base revenue growth was ~15%).
Ebitda margins at 25% (down 160 basis points YoY, up 340bps QoQ) was a function of poor gross margins (67% due to higher inventory stocking and Remdesivir) adjusted for Remdesivir gross and Ebitda margins came in line.
Nonetheless, Syngene International's management remains confident of its growth trajectory and re-iterated its mid-teens revenue growth for FY22E on the back of continuous client additions, extension of existing contracts, increasing manufacturing and biological contributions besides currency tailwinds.
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