Syngene Intl. (SYNGENE)

FairStock Score: 31/100 — RISKY

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Low leverage with debt/equity of 0.12 and positive free cash flow of ₹424 Cr provides financial stability.
• Promoter holding of 52.68% aligns ownership with minority shareholders.
• 5-year revenue CAGR of 10.77% shows the business has built a respectable research services franchise.
• Altman Z-Score of 3.20 and Piotroski F-Score of 6/9 suggest the balance sheet is not under immediate distress.

Concerns

• Profit growth fell 29.79%, and the latest quarter's net profit of only ₹15 Cr on ₹917 Cr of sales shows extremely thin margins.
• Valuation is rich: P/E of 41.56, P/B of 3.65, and PEG of 19.87 leave no room for error.
• ROE of 7.45% is weak for the premium multiple being paid.
• Price of ₹428.35 is far above Graham Number of ₹152.14 and DCF intrinsic value of ₹10.25, implying a deeply negative margin of safety.

AI Analysis

Syngene is not the kind of business I'd pay a premium for today. Revenues grew only 5.05% over the last year, and profit fell 29.79%. In the latest quarter, sales of ₹917 Cr generated just ₹15 Cr of net profit—a thin margin that shows limited pricing power or operating leverage. The 5-year revenue CAGR of 10.77% is respectable for a research services firm, but growth is decelerating. On the balance sheet, debt/equity is 0.12 and free cash flow is ₹424 Cr, so the company is not distressed; Altman Z of 3.20 and Piotroski F-Score of 6/9 tell a moderately prudent story. But as a value investor, price matters. At ₹428.35, the P/E is 41.56, P/B is 3.65, and the ROE is only 7.45%—a low return for a premium multiple. Graham Number is ₹152.14, so the current price implies a margin of safety of -177.5%. Even the DCF intrinsic value of ₹10.25 is nowhere near the market price. Promoter holding at 52.68% is a positive, but it does not justify an absurd PEG of 19.87. The business has elements of a good franchise—research services with recurring client relationships—but I demand both a moat and earnings power. Right now, profit trends are disappointing and the valuation prices in perfection. With a 0.30% dividend yield, you are not being paid to wait. I would wait for either a meaningfully lower price or clear evidence that margins and profits have stabilized and reaccelerated. In Graham's words, the market is there to serve you, not guide you. Today Syngene is not offering me value; it is asking me to hope. I don't invest on hope.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer