Syngene’s net sales grew by 6% yoy to Rs 291cr and PAT grew by 3.7% yoy to Rs 62cr. EBITDA grew by 8.1% to Rs 96cr due to margin improvement led by superior business mix. EBITDA margin improved to 33% in 1QFY18 from 32.3% in 1QFY17.. We had expected PAT of Rs 61cr on the topline of Rs 296cr hence the result has met our expectations. What we like about the results is that the company has managed to come back to the growth in the quarter. In 3QFY17, ~10% of its Bangalore capacity got damaged in a fire incident which led to poor set of results over last two quarters. In 4QFY17, company saw decline in the topline, however with the marginal growth, we believe that company is showing signs of recovery. At the CMP Rs 476, Syngene trades at 23.0x its FY19E EPS. We like Syngene’s organic growth capabilities as well as increasing offerings. The signing of the commercial manufacturing agreement and expansion of the Amgen agreement are the new positive developments. We rate Syngene ‘Buy’ with a price target of Rs 558 (27.0x of FY19E EPS).

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