Biocon subsidiary to Invest USD 56 Million in Syngene USA Inc for Biologics Facility Acquisition; DIIs increased their stake in last Quarter

With a PE ratio of 57.6x, the company trades at a premium compared to the industry PE of 46x. The company has ROCE of 14.7 per cent and ROE of 13.2 per cent.  

Syngene International Limited has announced a strategic investment move involving its wholly owned subsidiary, Syngene USA Inc (SUSA). The company plans to invest up to USD 56 million in equity share capital of SUSA in one or more tranches. This investment aims to enhance Syngene's presence in the US market, with SUSA serving as a strategic arm since its incorporation in Delaware in August 2017. The turnover for SUSA in the fiscal year 2023-24 was USD 7,332,492. The transaction is between Syngene and its wholly owned subsidiary, thus not requiring Audit Committee or Shareholders’ approval under Regulation 23, as it does not involve any related party interest.

The investment will be used to finance the acquisition of a biologics facility from Emergent Manufacturing Operations Baltimore, LLC, and to meet general corporate and day-to-day operating requirements. The completion of this investment is expected by March 31, 2026, or another mutually agreed date. The acquisition will be made through cash consideration, and there will be no change in the shareholding structure of SUSA, which will remain a wholly owned subsidiary of Syngene.

Syngene International Limited's current stock market price is Rs 683, with a market capitalisation of Rs 27,507 crore. Over the past year, the stock has seen a return of -1.85 per cent, while over a three-year period, it has generated a return of 17.05 per cent. The company's stock has a 52-week high of Rs 960 and a low of Rs 608. Syngene continues to be a significant player in the market, focusing on expanding its strategic footprint internationally, particularly in the US. 

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In the Quarterly Results of December 2024, the company reported a revenue of Rs 943.70 crore, reflecting a YoY growth of 10.57 per cent and a QoQ increase of 5.91 per cent. The net profit stood at Rs 131.10 crore, marking a YoY rise of 17.58 per cent and a QoQ growth of 23.56 per cent. The net profit margin for the quarter was 13.89 per cent, compared to 11.91 per cent in September 2024 and 13.06 per cent in December 2023.

For the financial year 2024, the company’s revenue was Rs 3,488.60 crore, registering a growth of 9.26 per cent compared to Rs 3,192.90 crore in FY23. The net profit for the year stood at Rs 501.50 crore, up 7.98 per cent from Rs 433.00 crore in the previous year. The net profit margin for FY24 was 12.41 per cent, compared to 12.56 per cent in FY23.

As of December 2024, the shareholding pattern is as follows: Promoters hold 52.74 per cent, Foreign Institutional Investors (FIIs) hold 20.65 per cent, Domestic Institutional Investors (DIIs) hold 19.52 per cent, the public holds 6.79 per cent, and others hold 0.29 per cent. Compared to the previous quarter (September 2024), there is a decline in promoter shareholding from 54.72 per cent to 52.74 per cent, while DIIs increased their stake from 17.49 per cent to 19.52 per cent. Other categories show marginal changes. The number of shareholders increased from 1,07,338 to 1,28,806.

With a PE ratio of 57.6x, the company trades at a premium compared to the industry PE of 46x. The company has ROCE of 14.7 per cent and ROE of 13.2 per cent.  

Investors must keep this Mid-Cap stock on their radar.

Disclaimer: The article is for informational purposes only and not investment advice.