The capex plan of Bengaluru-based integrated research, development and manufacturing services company, Syngene International is expected to be in the range of ₹750-900 crore ($100-120 million) for the financial year 2021-22 (FY22).
The company, in its guidance for FY22, said “Despite the continuing uncertainty due to the pandemic, the focus of FY22 is to deliver a higher level of business growth: we expect growth in revenue from operations to be in the mid-teens range in the coming year. The year will focus on investment-led growth with expansion in infrastructure, staff headcount and capability additions across our core businesses and the ramp-up of our sales presence in key markets.”
Jonathan Hunt, Managing Director and Chief Executive Officer, Syngene International Ltd said, the company’s reported EBITDA margins are expected to stay at, or around, 30 per cent. “We continue to invest in the growth of our business with additional capex investments that are likely to lead to single digit profit growth.”
“The company’s guidance includes the Covid pandemic as a continuing factor but assumes that there is no material deterioration in our operating environment. Should there be a material change in the operating environment, the company will revisit and update its guidance as needed through the year.”
Q4 business update
The company’s Mangalore API manufacturing facility completed the qualification process and is now a GMP1-certified facility. The company also commissioned a new HPAPI2 laboratory that will support scale-up for manufacturing.
Syngene crossed a milestone with the extension of the collaboration with BMS until 2030. The BMS partnership dates from 1998 and a fully dedicated research centre was set up in Bengaluru in 2007. The new agreement includes an expansion in the breadth of drug discovery research, including chemistry, biology, drug metabolism, pharmacokinetics, and research focusing on translational medicine and pharmaceutical development. The agreement requires a 40 per cent increase in the number of scientists and an additional 50,000 square feet of dedicated laboratory space. “As part of this expansion, a number of additional scientists joined the company in the fourth quarter, the remainder will join in the next 18 months,” said Hunt.