SYNGENE - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 3.8

🧬 Syngene International Ltd (SYNGENE) offers solid capital efficiency, low debt, and sector relevance, though its high valuation and recent profit dip suggest a cautious accumulation strategy.

📈 Positive

• 📊 Capital Efficiency: ROCE of 12.8% and ROE of 9.78% reflect healthy operational performance.
• 📉 Low Leverage: Debt-to-equity ratio of 0.07 ensures financial stability and conservative capital structure.
• 📈 EPS Strength: ₹11.6 supports earnings visibility and valuation support.
• 📈 DII Confidence: DII holdings increased by 0.57%, indicating domestic institutional support.
• 🔬 Business Model: Strong presence in contract research and manufacturing services (CRAMS) with global pharma partnerships.

⚠️ Limitation

• 💰 Elevated Valuation: P/E of 56.2 is above the industry average of 44.8.
• 📉 High PEG Ratio: 43.6 suggests valuation may not be justified by growth.
• 📉 Profit Decline: PAT dropped from ₹174 Cr. to ₹74 Cr., indicating margin pressure or one-off adjustments.
• 📉 FII Outflows: FII holdings declined by 0.20%, reflecting foreign investor caution.
• 📉 Weak Technicals: Trading below 200 DMA and 52-week high with RSI at 52.4.

📉 Company Negative News

• Quarterly profit decline raises concerns over operational volatility.
• Stock down nearly 32% from 52-week high, reflecting valuation compression.

📈 Company Positive News

• Strong partnerships with global pharma giants and expansion in biologics and manufacturing services.
• Volume above weekly average suggests renewed investor interest.
• Positive MACD crossover indicates potential for technical recovery.

🏭 Industry

• Biotech and pharma services sector benefits from global outsourcing trends and R&D expansion.
• Industry P/E of 44.8 reflects growth optimism and innovation-driven valuation.
• Peers include Divi’s Labs, Biocon, and Laurus Labs.

🧾 Conclusion

• 📉 Entry Zone: ₹620–₹640 could be a favorable accumulation range based on DMA and RSI levels.
• 📈 Long-Term View: Hold for 3–5 years; strong fundamentals and global exposure support sustained growth.
• 🔍 Valuation Watch: Consider phased entry or wait for earnings rebound to justify premium pricing.