Syngene International Ltd Q1 FY23 Earnings Conference Call Insights

Key highlights from Syngene International Ltd (SYNGENE) Q1 FY23 Earnings Concall

Q&A Highlights:

• Prakash Agarwal from Axis Capital asked about the constant currency growth seen in 1Q23. Sibaji Biswas CFO said the underlying growth at constant currency has been 25% vs. underlying growth reported of 30%.

• Prakash Agarwal from Axis Capital enquired about Mangalore, when is it expected to start delivering dollar revenues. Jonathan Hunt MD replied that SYNGENE will continue with the margin range it has enjoyed traditionally as the business grows amongst all of the divisions.

• Shaleen Kumar with UBS Securities asked that while SYNGENE is increasing its guidance for the topline, would the company like to increase the PAT guidance also. Sibaji Biswas CFO said that PAT will grow single digit due to increase in effective tax rate YonY. SYNGENE expect the operating leverage to improve from next year and that should improve the overall PAT outlook.

• Surya Patra from PhillipCapital asked about the regulatory clearance pathway for the biologic manufacturing plants to be utilized for Zoetis, if it’s the same as US inspection and clearance. Jonathan Hunt MD said that on the high level it’s no. It’s the same regulator and the same sort of dimensions.

• Sonal Gupta with L&T Mutual Fund asked that as the rupee depreciates shouldn’t the margins also improve. Jonathan Hunt MD said that the company largely price things in dollar. And dollar when translated into rupee has turned out to be more valuable during 1Q23. If rupee depreciates above INR78, it doesn’t impact anything on the EBITDA.

• Vinayak Mohta from Stallion Asset asked that on the Zoetis contract, what kind of ROIC is SYNGENE looking to maintain in the contract. Sibaji Biswas CFO replied that SYNGENE effectively expect Zoetis to give a return which does not dilute SYNGENE’s current existing return on capital employed.