Syngene - Reality Check On Recovery? Stay Positive For Now: Yes Securities

Yes Securities Report

We parsed the commentary of Charles River Laboratories India Pvt. Ltd., a global Contract Development and Manufacturing Organization player that offers preclinical and post-trial services along with manufacturing capabilities. While we are cognizant there is not a perfect overlap, a certain commonality exists across discovery services and pre-IND work as well as target customers.

We highlight sobering commentary put out by Charles River Laboratories in its Q2 earnings call which is a change from the positive narrative of recovery in biotech funding. Charles River Laboratories believes there is an urgency amongst clients to prioritize trial work with an eye on commercial marketing. This implies less of a focus on early-stage research and discovery – areas which are important for Syngene International Ltd.

Charles River Laboratories believes the soft demand and cutback in large biopharma would continue in 2025, a scenario which is certainly not factored in ours as well as consensus growth expectation for Syngene. Reckon what such a commentary from a global peer does is put the spotlight back on Syngene H2 growth.

For now, our 'Add' rating stays even as the purpose of this update is to highlight the developing backdrop amidst which Syngene has to deliver a strong performance to meet FY25 guidance

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