On Friday, Goldman Sachs reaffirmed its positive stance on Syngene International Ltd (SYNG:IN) stock by maintaining a Buy rating and elevating the price target to INR1,000.00, up from the previous target of INR925.00. The adjustment follows Syngene's performance in the first half of the fiscal year 2025, which, despite being challenging, met expectations.
Syngene has confirmed its revenue growth forecast for the fiscal year 2025, anticipating high single-digit increases. The company expects to see a stronger performance in the latter half of the year. Additionally, Syngene projected its EBITDA margins to rebound to the high-20% range and foresees single-digit profit after tax (PAT) growth during the same timeframe.
The company's management highlighted the recent surge in pilot projects from pharmaceutical clients seeking alternatives to outsourcing in China. There was a notable 50% year-over-year increase in requests for quotations (RFQs) in the first quarter and a 36% rise in audits during the first half of the year. These developments are seen as the groundwork for Syngene to become the primary beneficiary of the diversification strategy often referred to as the "China+1" theme.
The "China+1" strategy involves companies looking beyond China for outsourcing to mitigate risks and diversify their supply chains. Syngene's uptick in RFQs and audits indicates a growing interest from pharma clients in exploring these options, which could position the company favorably in the market.
Goldman Sachs' increased price target for Syngene reflects the firm's confidence in the company's ability to capitalize on the ongoing industry shift and its potential for sustained financial growth.
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