Synopsis: Macquarie maintains an Outperform rating on Syngene, citing growth drivers aligning for FY26, including CRO growth, a strong CDO segment, and potential profitability from new projects, and has set a target price of ₹ 835.
The shares of the Small-cap firm, specializing in being a Contract Research, Development, and Manufacturing Organization (CRDMO), offering integrated scientific services from early-stage drug discovery to commercial production, are in focus after leading Global Brokerage firm Macquarie initiated a Buy Target with an upside potential of 27 percent as Growth Drivers Align for FY26.
With a market capitalization of Rs. 26,465.06 Crores on Wednesday, the shares of Syngene International Ltd closed at Rs. 656.80 by rising upto 3.4 percent, reaching a high of Rs. 678.00 compared to its previous closing price of Rs. 655.25.
Syngene International Ltd, a Contract Research, Development, and Manufacturing Organization (CRDMO) offering integrated scientific services from early-stage drug discovery to commercial production, is in focus after leading brokerage firm Macquarie initiated a Buy rating on the company’s stock with a target of Rs. 835, indicating an upside potential of up to 27 percent from yesterday’s closing price.
The reasons for the “Buy” target
- Strong Positioning for 2026: Syngene is well placed to capitalise on industry trends and internal growth initiatives.
- Attractive Risk-Reward Profile: Analysts see potential upside as fundamentals improve, making the stock appealing relative to risks.
- CRO Growth Expected to Accelerate: Contract Research Organization (CRO) business may grow faster as biotech funding picks up, driving more outsourced research projects.
- CDO Segment as Additional Growth Driver: The Global Broker believes the Custom Development & Outsourcing (CDO) business provides another avenue for revenue expansion.
- CMO Headwinds Already Factored In: Challenges in the Contract Manufacturing Organization (CMO) segment are already reflected in company guidance, limiting downside surprises.
- New Projects Could Boost Profitability: Brokerage also portrays that Upcoming initiatives and the projects have the potential to enhance margins through operating leverage, improving overall profitability.
Financials & Others
The company’s revenue rose by 2.20 percent from Rs. 891 crores to Rs. 911 crores in Q2FY25-26. Meanwhile, Net profit declined from Rs. 106 crores to Rs. 67 crores in the same period.
The company shows a decent return on capital employed (ROCE) of 13.5%, indicating efficient use of its total capital. Its return on equity (ROE) is 10.5%, reflecting moderate profitability for shareholders. With a low debt-to-equity ratio of 0.12, the company is lightly leveraged, suggesting a strong equity base and low financial risk.
Syngene is a contract research, development and manufacturing organization (CRDMO) that provides integrated discovery, development, and manufacturing services to pharmaceutical, biotechnology, animal healthcare, consumer goods and agrochemical companies.
Syngene’s clients are world leaders in their fields, ranging from leading global multinationals to small and medium-sized start-ups, non-profit institutions, academic institutes and government organisations.
The company serves around 400 active clients, including 14 of the top 20 global pharma companies. With world-class infrastructure and an international presence across campuses in Bangalore, Hyderabad, Mangalore, and Baltimore, with state-of-the-art facilities to meet global standards. The organisation has a total headcount of 8,235, including 5,641 highly skilled scientists.
The company has extensive experience across various industry sectors, collaborating with leading global partners. Their expertise spans large and mid-sized biopharma, emerging biopharma, animal health, agrochemicals, consumer packaged goods (CPG), and chemicals/polymers, working alongside prominent organisations in each field.
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