Syngene is India’s leading contract research company, with presence across the entire chain of research and development services for the pharma industry. Construction of a bulk drug unit is complete for offering contract manufacturing services. The company offers cost arbitrage for R&D spends by pharma companies and that is its main strength. Syngene has set up dedicated research services for many large clients which skews client concentration and that is a risk factor but also provides revenue stickiness. We have a positive view on the company based on very positive management commentary (10+ revenue growth) and good prospects for the industry. Commissioning of new facilities could pressure margins in the near term but drive volumes later. Recent covid pandemic is long term positive for the stock as it will lead to higher R&D spends by global pharma companies. We have a neutral weight rating due to fair valuations – 28-04-2021 Price: 608.75 Rating: Neutral Weight Recommendation : Hold
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