Syngene International Limited

Syngene International concluded FY26 with a muted top-line growth of 3% year-on-year, primarily due to the significant impact of Librela destocking. Despite this, the fourth quarter demonstrated strong sequential growth of 13%, with revenue from operations reaching INR 1,037 crores. Operating EBITDA for Q4 stood at INR 303 crores, achieving a 29% margin. However, reported profit after tax (before exceptional items^📎) for FY26 was INR 380 crores, a 20% decline year-on-year, and for Q4, it was INR 153 crores, down 16% year-on-year.

Management anticipates FY27 to be a transition year, projecting broadly flat performance, with EBITDA margins maintained in the mid-20s. The adverse impact of Librela destocking is expected to be most pronounced in Q1 and Q2 FY27, with almost no volumes during this period. Growth is expected to be weighted towards the second half^⚖️ of FY27 as new contracts ramp up, with stronger growth anticipated from FY28 onwards as the company moves beyond the Librela headwind and leverages its strategic investments.

Syngene is actively building new capabilities in advanced modalities such as peptides, antibody drug conjugates (ADCs), and oligonucleotides. During Q4, the company commenced operations at its state-of-the-art ADC discovery laboratory, designed to support early-stage research. This facility integrates with existing ADC development and manufacturing capabilities, enabling a seamless pathway from discovery to production. Investments also include a new commercial scale facility for liquid-filled hard gelatin capsules, strengthening oral solid dosage capabilities.

The CDMO business is experiencing an acceleration in pipeline buildup, with increased client interactions at the Unit 3 biologics facility in Bengaluru. Preparations are progressing well at the Bayview biologics facility in the United States, with active engagement with prospective customers for its operationalization this year. While Unit 3 is fully capitalized, Bayview's capitalization is still partial, and management expects to provide further updates on its full operationalization and P&L impact.

A key highlight for the year was the extension of Syngene’s long-standing partnership with Bristol-Myers Squibb through to 2035. This expanded agreement broadens the scope of collaboration across the entire drug development life cycle, including discovery, translational sciences, pharmaceutical development, manufacturing, and clinical research. This extension provides a strategic framework for Syngene to support Bristol-Myers Squibb's evolving pipelines and portfolios, though growth from this partnership is expected to be around US inflation levels rather than linear.

Ms. Kiran Mazumdar-Shaw has returned as Executive Chairperson, emphasizing the company's transition into its next phase of growth. The company is also undergoing leadership changes, including new appointments, to strengthen its focus on CDMO operational excellence and partnerships. Syngene is actively investing in AI and digital technologies, with a team of AI scientists working to enhance speed, productivity, predictability, and scale across discovery, development, and manufacturing, aiming to create differentiated offerings for global customers.