SYNGENE - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.5

📊 Core Financials Overview

Profitability

ROE of 9.78% and ROCE of 12.8% are modest, indicating decent but not exceptional capital efficiency.

EPS of ₹11.6 and PAT of ₹74 Cr (down from ₹174 Cr) show a 48.1% QoQ decline, pointing to earnings volatility.

Despite the dip, Syngene maintains a healthy operating margin and diversified revenue streams

1

.

Balance Sheet Strength

Debt-to-equity ratio of 0.07 — very low, signaling strong financial discipline.

Book Value of ₹115 vs Current Price ₹658 → P/B ratio ~5.72, suggesting premium pricing.

Dividend Yield of 0.19% is minimal, consistent with a reinvestment-focused strategy.

Cash Flow & Stability

PEG ratio of 43.9 is extremely high, indicating overvaluation relative to earnings growth.

RSI at 50.4 and MACD negative suggest neutral technical momentum, with potential for consolidation.

📉 Valuation Metrics

Metric Value Insight

P/E Ratio 56.6 Overvalued vs industry PE of 51.1

P/B Ratio ~5.72 Premium pricing

PEG Ratio 43.9 Indicates stretched valuation

Intrinsic Value ~₹580–₹600 Slightly below current price

Syngene appears moderately overvalued, especially in light of recent earnings softness.

🧪 Business Model & Competitive Edge

Sector: Syngene International Ltd is a leading contract research and manufacturing organization (CRAMS), serving global pharma, biotech, and specialty chemical firms.

Strengths

Vertically integrated services across discovery, development, and manufacturing

Long-term partnerships with global majors like BMS, Amgen, and Baxter

1

State-of-the-art facilities and regulatory certifications (USFDA, ISO, GLP)

1

Challenges

High valuation multiples

FII holding declined (−2.96%), though DII interest rose (+2.55%)

Recent PAT decline may reflect project delays or margin compression

Syngene derives 35% of revenue from Discovery Services, 32% from Dedicated Centers, and 33% from Development & Manufacturing

1

—a balanced mix that supports long-term growth.

📌 Entry Zone Recommendation

Suggested Entry Range: ₹580–₹600

Below 200 DMA (₹697) and closer to intrinsic value

RSI and MACD suggest waiting for technical confirmation before entry

🧭 Long-Term Holding Guidance

Hold if Already Invested: Strong fundamentals and global partnerships support long-term potential.

Accumulate on Dips: Especially near ₹600 for better margin of safety.

Watchlist Triggers

EPS recovery and margin expansion

New contract wins or regulatory approvals

Institutional accumulation

Syngene is a high-quality play in outsourced pharma R&D, but its valuation calls for patience. You can explore deeper insights on Invest Yadnya’s stock analysis and TopStockResearch’s dashboard for more details.

1

investyadnya.in

Edit in a page