Contract drug research and manufacturing firm Syngene International Ltd has significantly revised its full-year revenue outlook, moving from an earlier projection of mid-single digit growth to a negative 2-3% range. This adjustment comes as the destocking of a single biologics product continues to weigh heavily on the company's performance for a second consecutive quarter.
CEO Peter Bains Explains Guidance Revision
In an exclusive interview with Mint on Friday, chief executive and managing director Peter Bains detailed the reasons behind this substantial guidance revision. "In light of the impact that we're seeing on this single large molecule, we will be adjusting our guidance on revenue, where we had a mid-single digit guidance previously, which will now go to 2-3% negative," Bains stated.
He emphasized that this particular product represented the largest commercial offering within Syngene's manufacturing platform, making its impact particularly material. "This single product was the largest commercial product in our manufacturing platform, and its impact has been material, and it is clearly playing through in our results this quarter as it has in the quarters earlier in the year," Bains explained.
Q3 Financial Performance Details
The company released its third-quarter financial results on 22 January, revealing numbers that fell short of market expectations. Revenue from operations declined by 3% year-on-year to ₹917 crore in Q3FY26. Even more concerning was the 26% drop in Ebitda to ₹225 crore, with margins compressing significantly from 31% to 24% compared to the same period last year.
Profit after tax (PAT) before exceptional items experienced a sharp decline of 44% to ₹73 crore. These results contrasted with a Bloomberg poll of four brokerages that had anticipated revenue of ₹980 crore and PAT of ₹99 crore.
Nine-Month Performance Overview
For the nine months ending December 2025, the company reported a modest 3% year-on-year revenue increase to ₹2,702 crore. However, Ebitda declined by 12% to ₹664 crore during this period, while PAT fell by 22% to ₹227 crore, indicating broader challenges beyond the single quarter performance.
Business Segments and Growth Offsets
Bains acknowledged that the impact of this single molecule is expected to persist in upcoming quarters but expressed optimism about partial offset through growth from other business areas. The company's research and discovery services division, which accounts for nearly two-thirds of total sales, continues to show resilience.
During the quarter, research services secured new programs, with a particularly significant development being the extension of Syngene's long-standing partnership with Bristol Myers Squibb through 2035. This expanded collaboration covers joint development across discovery, development, manufacturing, and clinical research domains.
Strategic Investments and Capability Building
Syngene continues to invest strategically in advanced manufacturing and chemistry capabilities. The company recently commissioned a commercial-scale capsule facility and expanded catalytic and flow chemistry laboratories at its Hyderabad site, strengthening its integrated CRDMO (Contract Research, Development, and Manufacturing Organization) platform.
The firm has been actively building capabilities in emerging modalities such as antibody-drug conjugates (ADCs) and peptides, areas witnessing increasing industry traction. Additionally, Syngene has invested in PROTACs (proteolysis-targeting chimaeras) and degraders technology, representing a dual-target therapy approach for previously "undruggable" diseases.
"This is a very exciting area of development where we see a long-term opportunity as science is unveiling new ways for interventional medicines," Bains commented about these advanced therapeutic approaches.
Market Reaction and Share Performance
Investors reacted strongly to the revised guidance and quarterly results, with Syngene's shares closing 8.88% lower on the National Stock Exchange on Friday at ₹540. This significant drop reflects market concerns about the company's near-term growth prospects amid the ongoing challenges with its key biologics product.
Despite the current headwinds, Bains emphasized that outside of the problematic product, Syngene's underlying business has maintained steady growth, suggesting potential for recovery once the destocking cycle completes and other business segments gain further momentum.
