By: IPP Bureau
Last updated : December 07, 2021 12:59 pm
Key takeaways of recent quarter & conference call highlights
Revenues grew 17.4% YoY, 2.6% QoQ to Rs 610.2 crore with discovery services witnessing client demand, particularly within the emerging biopharma segment along with continued manufacturing of Remdesivir for Covid-19
EBITDA margins contracted 89 bps YoY while improving 132 bps QoQ to 29.1%, owing to higher employee expenses (up 14.5% YoY, 7.9% QoQ) and raw material expenses (up 31.3%, down 13.9% QoQ) amid stocking of raw materials
EBITDA grew 13.9% YoY, 7.5% QoQ to Rs 177.4 crore. Adjusted PAT was at Rs 66.7 crore (down 20.7% YoY, 13.7% QoQ). Delta vis-à-vis EBITDA is mainly due to higher depreciation and tax expenses and lower other income.
Discovery services saw positive demand for newer services like Protein Degradation Technology (PROTACS) and peptide synthesis. Higher raw material expenses in Q2 due to aggressive stocking of raw materials to avoid unforeseen future disruptions while an increase in employee expenses was due to annual increments and key hirings across the company.
This has affected EBITDA margins in Q2FY22 and the management expects this to normalise in future. Development and manufacturing services contribute one-third of total revenue.
Syngene is operating at 100% normal level and key client markets in the US and Europe are beginning to return to normal operations. Continued to manufacture Remdesivir for Covid-19, under a voluntary licensing agreement from Gilead. Expansion of microbial manufacturing and capacity building in mammalian manufacturing.
Client base in biologics manufacturing expanded during the quarter. Manufacturing of small molecules at Mangalore remains on track to achieve USFDA approval within two years. Exceptional item includes a reversal of Rs 25.3 crore of service export incentives (net of tax) to FY20 due to government notification in the quarter capping the incentives for the research and development services at Rs 5 crore per exporter.