Syngene has proven capability as a CRO. However, they still have to prove their capability as a CDMO. Other than Zoetis deal there has been no other announcement. Plus their small API manufacturing unit in mangalore is lying idle & mgmt refuses to give any capacity utilisation or molecule pipeline under development.
If we look at Syngene Viz a Viz Laurus;
Syngene has ~2.8 million sq.ft. of R&D infrastructure and over 5,600 scientists. Company did a revenue of ~3400 Cr in FY24.
Laurus has 10 acres (0.435 Sq. Ft.) of R&D Centre in Hyderabad, staffed with over 1101 R&D scientists. They did a revenue of ~5000Cr in Fy24.
If we look at the capex plan, Laurus, Aurobindo, Divi’s are doing much more capex in manufacturing than Syngene.
Goldman sachs report in July 2024 on CRDMO pointed out that, “Syngene for its leadership position in the India CRO segment while we believe its CDMO business is set to inflect.”
In my view, till that inflection point in Syngene is visible, I will be waiting on the sideline.
Disc: Invested & biased.
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