SYNGENE - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | SYNGENE | Market Cap | 18,741 Cr. | Current Price | 465 ₹ | High / Low | 761 ₹ |
| Stock P/E | 48.9 | Book Value | 115 ₹ | Dividend Yield | 0.27 % | ROCE | 12.8 % |
| ROE | 9.78 % | Face Value | 10.0 ₹ | DMA 50 | 606 ₹ | DMA 200 | 654 ₹ |
| Chg in FII Hold | -1.35 % | Chg in DII Hold | 1.21 % | PAT Qtr | 68.7 Cr. | PAT Prev Qtr | 66.2 Cr. |
| RSI | 9.80 | MACD | -44.9 | Volume | 14,29,518 | Avg Vol 1Wk | 24,46,234 |
| Low price | 458 ₹ | High price | 761 ₹ | PEG Ratio | 37.9 | Debt to equity | 0.07 |
| 52w Index | 2.36 % | Qtr Profit Var | -44.2 % | EPS | 8.22 ₹ | Industry PE | 36.1 |
💰 Financials: Syngene International (SYNGENE) shows moderate fundamentals with ROE at 9.78% and ROCE at 12.8%, reflecting average efficiency in capital usage. Debt-to-equity ratio of 0.07 highlights a conservative balance sheet with minimal leverage. Quarterly PAT stood at ₹68.7 Cr., slightly higher than the previous quarter (₹66.2 Cr.), but year-on-year profit variation (-44.2%) indicates earnings pressure. Cash flows remain stable, supported by contract research and manufacturing services.
📊 Valuation: Current P/E of 48.9 is significantly above the industry average of 36.1, suggesting premium valuation. P/B ratio (~4.0) is high relative to book value of ₹115. PEG ratio of 37.9 signals severe overvaluation compared to growth prospects. Intrinsic value analysis suggests the stock is trading above fair value, requiring caution for new entries.
🔬 Business Model & Competitive Advantage: Syngene operates as a leading contract research and manufacturing organization (CRMO), serving global pharmaceutical, biotech, and agrochemical companies. Its competitive advantage lies in strong client relationships, specialized R&D capabilities, and diversified service offerings. However, profitability is sensitive to global demand cycles and regulatory compliance costs.
📈 Entry Zone: Considering DMA 50 (₹606) and DMA 200 (₹654), accumulation is attractive only if the price dips below ₹450–₹470. Long-term investors should hold cautiously, as valuations are stretched despite strong industry positioning.
Positive
- Low debt-to-equity ratio (0.07) ensures financial stability.
- Strong client base across pharma, biotech, and agrochemicals.
- Specialized R&D capabilities and diversified service offerings.
- Sequential PAT growth from ₹66.2 Cr. to ₹68.7 Cr.
Limitation
- High P/E (48.9) compared to industry average (36.1).
- P/B ratio (~4.0) suggests expensive valuation.
- PEG ratio of 37.9 signals severe overvaluation relative to growth.
- Year-on-year profit variation (-44.2%) highlights earnings pressure.
Company Negative News
- Decline in FII holdings (-1.35%).
- Stock trading near 52-week low index (2.36%), reflecting weak sentiment.
Company Positive News
- Increase in DII holdings (+1.21%), signaling domestic institutional confidence.
- Stable sequential profit growth supports near-term resilience.
Industry
- Pharma services industry P/E at 36.1 indicates Syngene trades at a premium.
- Sector growth driven by outsourcing of R&D and manufacturing.
- Global demand cycles and regulatory compliance remain key risks.
Conclusion
🔑 Syngene International is a fundamentally stable company with strong industry positioning and low debt. However, stretched valuations and weak year-on-year profitability limit near-term attractiveness. Entry around ₹450–₹470 offers a better risk-reward balance. Long-term holding is justified for investors seeking exposure to contract research and manufacturing, but caution is advised due to premium pricing.
I can also prepare a comparative HTML snapshot against peers like Divi’s Laboratories and Biocon to highlight Syngene’s relative valuation and efficiency.