SYNGENE - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.7
| Stock Code | SYNGENE | Market Cap | 19,009 Cr. | Current Price | 472 ₹ | High / Low | 761 ₹ |
| Stock P/E | 49.6 | Book Value | 115 ₹ | Dividend Yield | 0.26 % | ROCE | 12.8 % |
| ROE | 9.78 % | Face Value | 10.0 ₹ | DMA 50 | 591 ₹ | DMA 200 | 649 ₹ |
| Chg in FII Hold | -1.35 % | Chg in DII Hold | 1.21 % | PAT Qtr | 68.7 Cr. | PAT Prev Qtr | 66.2 Cr. |
| RSI | 16.9 | MACD | -47.0 | Volume | 7,67,650 | Avg Vol 1Wk | 12,23,246 |
| Low price | 456 ₹ | High price | 761 ₹ | PEG Ratio | 38.4 | Debt to equity | 0.07 |
| 52w Index | 5.24 % | Qtr Profit Var | -44.2 % | EPS | 8.22 ₹ | Industry PE | 78.8 |
📊 Analysis: SYNGENE shows weak long-term fundamentals with ROE at 9.78% and ROCE at 12.8%, both below compounding benchmarks. The P/E of 49.6 is high, though lower than the industry average of 78.8, but the PEG ratio of 38.4 highlights expensive growth prospects. Dividend yield of 0.26% is negligible. Technicals show weakness with RSI at 16.9 (oversold zone) and MACD at -47.0, indicating bearish momentum. The ideal entry zone lies between 450–470 ₹ for margin of safety. For existing holders, consider a medium-term horizon only if profitability improves; otherwise, exit near 500–520 ₹ resistance is prudent.
✅ Positive
- Large market cap of 19,009 Cr. ensures stability in the biotech space.
- Low debt-to-equity ratio (0.07) indicates strong financial discipline.
- DII holdings increased by 1.21%, showing domestic investor confidence.
- Sequential PAT growth (68.7 Cr. vs 66.2 Cr.) shows marginal improvement.
⚠️ Limitation
- Low ROE (9.78%) and ROCE (12.8%) limit compounding potential.
- High PEG ratio (38.4) highlights expensive growth valuation.
- Dividend yield of 0.26% is negligible.
- FII holdings decreased by -1.35%, showing reduced foreign confidence.
📉 Company Negative News
- Quarterly profit variation at -44.2% indicates earnings pressure.
- Stock trading at only 5.24% of 52-week index range, reflecting weak sentiment.
- Bearish technical indicators (RSI oversold, MACD negative).
📈 Company Positive News
- Sequential PAT growth shows operational resilience.
- Domestic institutional investors increasing stake.
- Debt-free balance sheet enhances financial stability.
🏭 Industry
- Biotech and pharma research sector has long-term demand drivers.
- Industry P/E at 78.8 suggests SYNGENE trades at a discount, though still expensive relative to earnings.
- Structural drivers: global R&D outsourcing, drug discovery partnerships, and healthcare innovation.
🔎 Conclusion
SYNGENE earns a rating of 2.7 due to weak ROE/ROCE, expensive valuations, and negligible dividend yield. Long-term investors should only consider entry in the 450–470 ₹ zone for margin of safety. Current holders may adopt a medium-term horizon, with partial profit booking near 500–520 ₹ resistance unless profitability improves. The stock remains a speculative biotech play rather than a strong long-term compounding candidate.