Stryker shares tumble despite strong Q2 results and raised guidance
On Tuesday, Kotak analysts began coverage of Syngene International Ltd (NSE:SYNN) (SYNG:IN), rating the stock as a Buy with a price target of INR875.00. The firm highlighted Syngene’s position as India’s leading Contract Research Organization (CRO) with a strong focus on innovation. Anticipating an uptick in the CRO sector, Kotak’s analysis suggests that Syngene is well-prepared to capitalize on market opportunities, having invested in discovery capacities ahead of demand.
Syngene reportedly missed out on projects in the fiscal year 2022 due to a lack of discovery capacities, but has since taken a proactive approach to investment. This strategy is expected to pay off as the funding environment improves, and the company’s discovery commercial engine, which currently has approximately one year of spare capacity, is projected to drive growth.
The company has also made a name for itself as a dependable early-stage Contract Development and Manufacturing Organization (CDMO). A rise in pilot projects is anticipated, which could lead to increased utilization rates at its facilities in Mangaluru and Unit-III. These developments are likely to contribute to Syngene’s financial performance, with Kotak predicting a Compound Annual Growth Rate (CAGR) of 14% for EBITDA and 13% for Earnings Per Share (EPS) over the period from FY2024 to FY2028E.
Kotak’s position is based on Syngene’s strategic investments and its ability to attract a higher volume of projects. This optimism is reflected in the Buy rating and the forward valuation of INR875, suggesting confidence in the company’s growth trajectory and operational efficiency over the medium term.
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