Q3 2026 Syngene International Ltd Earnings Call

January 23, 2026

Operator: Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0 on your touchtone phone. Please note that this call is being recorded. I now hand the conference over to Ms. Nandini Agarwal. Thank you, and over to you.

as a reminder all participant lines will be in the listen, only mode and there will be an opportunity for you to ask questions after the presentation concludes

So you need assistance during the conference call, please signal and Operator by pressing star then zero on your touchtone phone.

Please note that this call is being recorded.

I now hand the conference over to miss nandini Agarwal. Thank you and over to you.

Nandini Agarwal: Thank you. Good afternoon to everyone. Thank you for joining us on this call to discuss Syngene's Q3 and 9 months results for FY26. To discuss the financial and business performance for the period, we have on this call today Mr. Peter Bains, Syngene's Managing Director and CEO, and Mr. Deepak Jain, our CFO. After the opening remarks, Peter and Deepak will be happy to answer any questions you may have. Before we begin, I would like to caution that comments made during this conference call today will contain certain forward-looking statements and must be viewed in relation to the risks pertaining to the business. The safe harbor clause indicated in the investor presentation also applies to this conference call. The replay of this call will be available for the next few days, and the transcript will be made available.

Thank you and good afternoon to everyone. Thank you for joining us on this. Call to discuss in June's third quarter and 9 months results for financial year, 2026 to discuss the financial and business performance for the period. We have on this call today, Mr. Peter Baines sings managing director and CEO and Mr. Deepak Jen, our CFO after the opening remarks, Peter and Deepak will be happy to answer any questions you may have.

Before we begin, I would like to caution that comments made during this conference call today will contain certain forward-looking statements and must be viewed in relation to the risk pertaining to the business. The Safe Harbor Clause indicated in the investor presentation also applies to this conference call.

The replay of this call will be available for the next few days, and the transcript will be made available.

With this, I would now turn the call to a managing director and CEO Mr. Peter Williams.

Nandini Agarwal: With this, I would now turn the call to our Managing Director and CEO, Mr. Peter Bains.

Thank you. Nandini good afternoon, everybody. And thank you for joining us in today's call.

Peter Bains: Thank you, Nandini. Good afternoon, everybody, and thank you for joining us in today's call. I will begin with a brief overview and commentary of our key financials for the quarter and for the first nine months of the financial year before I move on to our operational and strategic highlights. I will then hand over to Deepak, who will provide a more detailed breakdown of the financials. Let me start by addressing the numbers. For Q3, revenue from operations declined 3% year-on-year to INR 917 crore. Operating EBITDA for the quarter stood at INR 209 crore with a margin of 23%, while profit after tax before exceptional items was INR 73 crore. On a nine-month basis, revenue from operations increased 3% year-on-year to INR 2,702 crore.

I will begin with a brief overview and commentary of our key financials for the quarter and for the first 9 months of the financial year,

before I move on to our operational and strategic highlights.

I will then hand over to DPAC who will provide a more detailed breakdown of the financials?

Let me start by addressing the numbers.

For the third quarter revenue from operations declined, 3%, year-on-year to 917 pools.

Operating ebit da for the quarter. Stood at 209 crew with a margin of 23% of our profit after tax before. Exceptional items was 73.

On a 9-month basis, revenue from operations increased 3%, year-on-year to 2,702 groups.

Peter Bains: Operating EBITDA for the period was INR 615 crore with a margin of 23%, while profit after tax before exceptional items stood at INR 227 crore. I would now like to discuss the key underlying dynamics that have shaped this performance delivery and profile. The key variable impacting our Q3 performance has been the ongoing impact related to a single commercial stage product from our largest large molecule biologics customer. We have mentioned this impact to you previously during our interactions this year. Outside of this singular matter, our underlying business performance has shown steady progress, which I will now outline. As you know, Syngene operates across two business segments, research services and contract development and manufacturing services, and this includes both large and small molecules. Across both these segments, our underlying growth has remained steady during the quarter.

Operating ebit data for the period, was 6154 with a margin of 23% of profit after tax before, exceptional items, stood at 227.

I would now like to discuss the key underlying dynamics that have shaped this performance delivery and profile.

The key variable impacting our third quarter performance has been the ongoing impact related to a single commercial stage product, from our largest large molecule biologics customs.

We have mentioned this impact to you, previously, during our interactions this year.

outside of this singular matter, our underlying business performance has shown steady progress which I will now outline

as you know, senjin operates across 2, business segments,

Research Services and contract development and Manufacturing Services.

And this includes both large and small molecules.

Across both, these segments, uh, underlying growth has remained steady during the quarter.

Peter Bains: Our research services business continued to secure new customers and contracts across chemistry, biology, translational, and clinical research platforms. In our CDMO business, we are seeing increased capacity utilization in both small molecules and large molecules as we attract new customers. Let me now draw your attention to some of the quarter's business highlights. Firstly, I am delighted to advise of the extension of our relationship with Bristol Myers Squibb, which remains our largest, and we are now supporting Bristol Myers with over 700 scientists in Bangalore and our longest-standing partnership now extending more than 25 years. We have extended our collaboration with BMS through to 2035, providing both partners with a strategic 10-year horizon to further develop and expand this unique long-standing collaboration.

Our Research Services business continued to secure, new customers and contracts across chemistry, biology translational, and clinical research platforms.

In our cdmo business. We are seeing increased Capac capacity utilization in both small molecules and large molecules, as we attract new customers.

Let me now, draw your attention to some of the quarters business highlights.

Firstly, I am delighted to advise of the extension of our relationship with Bristol Myers Squibb.

Which remains our largest and we are now supporting Bristol Myers with over 700, scientists in Bangalore and our longest standing partnership. Now, extending, more than 25 years

We have extended our collaboration with BMS through to 2035.

This unique long-standing collaboration.

Consistent with our strategy. We are continuing to invest ining, our scientific capabilities and Manufacturing Technologies.

Peter Bains: Consistent with our strategy, we are continuing to invest in strengthening our scientific capabilities and manufacturing technologies in areas that improve our ability to grow our business and to support our customers with differentiated services. During the quarter, we expanded our advanced chemistry capabilities at Hyderabad with new catalytic screening and flow chemistry laboratories. These facilities allow multiple reaction conditions to be evaluated parallel, improving speed, efficiency, and scalability. We also commissioned a new commercial scale facility for liquid-filled hard gelatin capsules, significantly enhancing our oral solid dosage platform. With this facility, we are now better equipped to support complex oral formulations that are becoming increasingly common in modern drug pipelines. At our Bayview Biologics facility in the United States, process and equipment validation are now complete and hiring is underway to support operations as planned.

In areas that improve our ability to grow our business and to support our customers with differentiated services.

During the quarter, we expanded our Advanced chemistry capabilities at Hyderabad with new catalytic, screening and flow chemistry. Laboratories

These facilities allow multiple reaction conditions to be evaluated, parallel improving speed, efficiency, and scalability.

We also commissioned a new commercial scale facility for liquid-filled. Hard gelatin capsules.

Significantly enhancing our oral solid dosage platforms.

With this facility, we are now better equipped to support complex oral formulations that are becoming increasingly common in modern drug Pipelines.

But our Bay View, biologics facility in the United States process and Equipment. Validation, and now, complete and hiring is underway to support operations as planned.

In summary and notwithstanding the single product impact. I have described.

Peter Bains: In summary, notwithstanding the single product impact I have described, our differentiated scientific capabilities, long-standing client relationships, and diversified business model across research services and CDMO continue to provide resilience, balance, and growth. These strengths, combined with disciplined investments in technology, AI, and new capabilities and capacity, position us well to strengthen our service proposition to our wide and growing customer base. Thank you, and I will now hand over to Deepak.

Our differentiated scientific capabilities long-standing client relationships and diversified business model across Research Services and cdmo continue to provide resilience, balance and growth.

These strengths combined with disciplined investments in technology Ai and new capabilities and capacity.

Position as well to strengthen our service, proposition to our wide, and growing customer base.

Thank you, and I will now hand over to D back.

Thank you, Peter, very good afternoon to everyone.

Deepak Jain: Thank you, Peter. Very good afternoon to everyone. Let me begin by discussing the Q3's performance, and then I will cover 9 months' performance, and finally the guidance before I close my commentary. First, looking at revenue. Revenue from operations for the Q3 was INR 917 crores, or a 3% year-on-year decline in reported terms and down 7% in constant currency. Let me elaborate on the numbers. This quarter saw a steady performance in the research business, led by volume improvement in discovery services. Revenue headwinds in CDMO continue to be the driving force by ongoing impact related to a single commercial product from our largest molecule biologics customer. Now let me turn to costs. Raw material costs stood at 25% of revenue in this quarter, similar to same in the last quarter.

Let me Begin by discussing the third quarter's performance and then I will cover 9 months performance and finally the guidance before I go before I close my commentary.

First looking at Revenue.

Revenue from operations for the third quarter was 917 crores.

Uh, 3% year-on-year, decline in reported terms and down 7% in constant currency.

Let me elaborate on the numbers.

This quarter resource steady performance in the research business led by volume Improvement and Discovery services.

Revenue, headwinds and cdmo continue to be the driving force by ongoing impact related to uh, single commercial product.

From our largest as molecule biology customer.

Now, let me turn to costs.

Raw material costs to that 25% off Revenue.

In this quarter similar to same. In the last quarter, we expect fully our raw materials cost to be around 25%.

Deepak Jain: We expect full-year raw material cost to be around 25%. Staff costs increased by about 8% year-over-year, in line with the annual increase in the investments in talent. Other direct costs, primarily comprising of power utility expenses, increased 2% year-over-year due to the new facilities at Bayview in the US and the biologics facility in Bangalore. Other expenses increased by 5% year-over-year due to general business expenses and automation and digital initiatives. Our company saw a hedge loss of INR 23.3 crores against a hedge gain of INR 1.7 crores in the same quarter of the previous year due to difference between average and spot hedge rates. Revenue for the quarter was hedged around 86.9. The average spot rate during the quarter was around 86.4. 89.4, sorry.

Staff costs increased by about 8% year on year in line, with the annual increase and the investments in Talent.

other direct costs, family, comprising of power, utility expenses increased 2% year on year, due to the new facilities at Bay View in the US and the biologics facility in Bangalore,

Other expenses increased by 5% year on year, due to General business expenses, and Automation and Tool initiatives.

a companies or hedge loss of 23.3 crores against the HP in a 1.7 crores in the same quarter of the previous year due to difference between average and Sport hedge rates,

Revenue for the quarter was hedged around 86.89. However, the average portrait during the quarter was around 86.4.

Deepak Jain: The movement in revenue and costs resulted in operating EBITDA of INR 209 crores, with a margin of 23% in the quarter versus 30% in the last year. Depreciation has increased in line with our plans and primarily due to addition in capacity at biologics manufacturing and manufacturing sites in Bangalore, which became operational this year. EBIT from operations was INR 95 crores with margins of 10%. Reported interest expense declined by 4% as borrowing reduced in Q3 FY26 compared to the same quarter last year. Other income declined by 16% compared to Q3 last year, primarily due to one-off related to interest on income taxes received last year, which was not there in the current year. As you will know, the government of India has recently notified the four labor codes consolidating the 29 existing labor laws.

89.4, sorry, um, the movement in Revenue, costs, revenue and cost resulted in operating a bit of 209, crores with the margin of 23%, in the quarter was the 30% in the last year.

Depreciation has increased in line with our plans and primary due to addition in capacity at biologics manufacturing and Manufacturing sites in Bangalore which became operational this year.

A bit from operations, was 95 crores with margins of 10%.

Reported interests extends declined by 4% as borrowing reduced in qcfi 26 compared to the same quarter last year.

Related to interest on income taxes received last year, which was not there in the current year.

As you will know, the government of India has recently notified the 4 labor courts. Consolidating the 29, existing data laws.

This resulted in an exceptional item.

Deepak Jain: This resulted in an exceptional item of INR 58 crores net of tax due to impact of change in gratuity liability under the Labor Code. Overall profit after tax, before exceptional items stood at INR 73 crores, down 44% year-on-year. Reported PAT was INR 15 crores, down 89% year-on-year. The normalized effective tax rate for the quarter was 22.8% as compared to 22.2% similar quarter last year. We expect the effective tax rate for the full year to be around in the range of 21% to 23%. In terms of CapEx, we continue to invest in building capabilities, technologies that enable us to become an integrated solution provider for our clients. During Q3, we invested total CapEx of around $9 million.

Of 58 crores, net of tax due to impact of change in gratuity, liability under the Labour Court.

Overall profit after tax. But before exceptional items, stood at 703 crores down 44% year on year.

Reported, that was 15 crores down 89% year on year.

The normalized effective tax rate for the quarter was 22.8% as compared to 22.2% similar quarter last year.

We expect the effective tax rate for the full year to be around in the range of 21 to 23%.

In terms of capex, we continue to invest in building capabilities technologies that enable us to become an integrative solution provider for our clients.

During the third quarter, we invested a total capacity of around 9 million dollars.

Deepak Jain: Around 50% was invested in research services, primarily across capability builds, including DMPK biology, ADC labs, and contractual obligations and dedicated centers along with regular CapEx expansion. Nearly 35% of the CapEx in the CDMO business, including for a new commercial scale facility for liquid-filled hard gelatin capsules, integrated integration of Bayview facility and the modification of unit three. The remaining CapEx was spent on digitization, automation, and towards common infrastructure. We continue to maintain a strong balance sheet. After meeting CapEx spends for the quarter, we have a net cash balance of INR 902 crores as of 31 December 2025. Turning to the nine-month performance, reported revenue from operations increased by 3% year-on-year. Raw material cost was down by 3%, driven by revenue mix. Staff costs increased by 12%.

Around 50% was invested in Research Services, primarily across capability bills, including dmpk, biology ADC labs and contractual obligations and dedicated centers along with regular capex expansion.

Nearly 35% of the capex and The cdmo Business.

Including for a new commercial scale, facility for liquid filled.

Hard gelatin, capsules integrated or integration of baby facility and the modification of units 3.

Remaining Capital spent on digitization Automation and towards common infrastructure.

We continue to maintain a strong balance sheet after meeting cap. Expense for the quarter. We have a net cash, balance of 902 crores, as of 31st, December 2025.

Turning to the 9-month performance. Reported revenue from operations increased by 3% year-on-year.

was down by 3%, driven by Revenue mix

And staff costs increased by 12%.

Deepak Jain: Our direct costs, primarily comprising of power, utilities increased by 3% and other operating costs increased by 11% as we continue to invest into expansion of our facilities and capabilities, including automation digitization that I spoke of earlier. Operating EBITDA margins stood at 23% for the 9 months of FY26 compared to 27% last year. Tax before exceptional item was down 22% year-on-year to INR 227 crores. Finally, let me turn now to the guidance for the year. With the ongoing single product impact in our large molecule business, we are revising our guidance. We expect to close the full year with a decline in revenue in the range of 3% to 5% with operating EBITDA margin in the range of 22% to 23%. Our CapEx is estimated to be around INR 45 million by the end of the year.

Our direct cost, family, comprising of powers utilities, increased by 3% and other operating costs increased by 11%, as we continue to invest into expansion of our facilities and capabilities, including automation, digitization that I spoke of earlier.

Operating a better margin store at 23% for the 9 months of Phi 26 compared to 27% last year.

Back before, exceptional item was down, 22% year on year to 227 crores.

Finally, let me turn now to the guidance for the year.

With the ongoing, single product impact in a large molecule business, we are revising our guidance.

We expect to close the full year with a decline in Revenue in the range of 3 to 5% with operating, a beta margin in the range of 22 to 23%.

Our capex is estimated to be around 45 million by the end of the year.

With that, let's open it up for questions. Thank you.

Thank you very much. We will now begin the question and answer session.

Deepak Jain: With that, let's open it up for questions. Thank you.

Operator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take the first question from the line of Kunal Dhamesha from Macquarie. Please go ahead.

Anyone who wishes to ask a question, may press star and 1 on the touchtone telephone

If you wish to remove yourself from the question queue, you may press star and 2.

Participants are requested to use handsets, while asking a question.

Ladies and gentlemen, we will wait for a moment while the question queue assembles.

We'll take a first question from the line of Kunal. The Misha from McQuarrie. Please go ahead.

And uh, on the impact from the biology product.

Kunal Dhamesha: Hi, thank you for the opportunity. The first question on the impact from the biologic product, which announced in this quarter, and seen some impact in previous quarters as well. As the year goes by, you know, how do we expect the impact of this in Q4, and how are we kind of budgeting from the FY22 prospect demand comes back here? Are there other drivers which basically help us grow from within our CMO business? Also, if you could provide a broad split between the CRO and CMO businesses quarter, that would be helpful.

In this contract, um, and see some impact in previous quarters as well. But as the year goes by, um, you know, how do we expect the impact of this in quarter 4? And um, how are we kind of budgeting? Uh, from the

Demand comes back here.

Started other drivers with uh basically help us grow from here within our cm of business.

and also, if you could provide a broad split between the the cro and CMO businesses quarter, that would be uh helpful

Peter Bains: Thank you, Kunal. Let me address the questions in depth and add something. Let me deal with the second one first. That is that the split between our research services and CDMO, about two-thirds research services, one-third CDMO. This quarter, that's a slight adjustment reflecting the single product impact that we're having, but that's the balance that we have. Now, turning to this single biologic product, you know, where we have been advising of the impact through this year. Obviously we expect to see this impact continue and play itself out in the next quarters, in the coming quarters. The impact that we're now experiencing is now being, you know, included clearly in the full year guidance.

The, um, let me address the questions and Deepak anyone, that's something. Um, let me deal with the second 1 first. Um, and and that is that the split between our Research Services and CDM mode about 2/3, Research Services, 1/3 cdmo.

This quarter, that's a slight adjustment reflecting the single product impact that we're having, uh, but that's the balance that we have now turning to this, uh, single biologic product, uh, you know, where we have been advising of the impact through this year. Um, obviously, we expect to see this impact continue and play itself out in in the next quarters in the coming quarters.

And the, you know, the impact that we're now experiencing is now being uh, you know, included clearly, in in the full year guidance.

Peter Bains: It would be inappropriate for me to comment in any detail on the product itself with our collaboration partner. I think that is as far as we can guide at this point.

Um, I mean, it it's not, uh, it would be inappropriate for me to comment in any detail or product itself up with our collaboration partner. Um, so I, I think that is, as far as we can guide it at this point.

so, uh, sorry, I I just missed, you know, in between I would expect the

Kunal Dhamesha: Sorry, I just missed, you know, in between, you expect the impact to continue in the next year or we are just guiding for the next quarter as of now?

uh, impact to continue in the next year, or or we just guiding for the next quarter as of

Kunal Dhamesha: Sorry, I just missed, you know, in between, you expect the impact to continue in the next year or we are just guiding for the next quarter as of now?

Peter Bains: Well, we expect the impact to continue in the coming quarters and then, you know, it will play itself out through the coming quarters. It will go beyond Q4.

Now, well we expect we expect the impact to continue in the coming quarters and then, you know, it will play itself out through a coming through the coming quarters.

But it will go beyond Q4. So, and and then the second,

Kunal Dhamesha: Then second. Okay. Then, any offset that we see, you know, which can help us, you know, with the growth in the CDMO business.

Okay. And then, uh, any offset that we see uh, you know, which can help us, uh,

Kunal Dhamesha: Then second. Okay. Then, any offset that we see, you know, which can help us, you know, with the growth in the CDMO business.

Uh but you know with with the growth in the cdmo business uh yeah, some of the pipeline project.

yes, you know and I I touched on it in my opening remarks and I'm happy to expand

Peter Bains: Yes.

Kunal Dhamesha: In terms of the pipeline project.

Peter Bains: Yes, Kunal, I touched on it in my opening remarks and I'm happy to expand. If we strip out the impact of this single product and look at what is happening across our business. Growth, what is encouraging is that growth, you know, is across our division. We take it, the impact out of our manufacturing platform. We are seeing increased capacity utilization both in small molecules and in large molecules. We're seeing that translate in the quarter, you know, into some growth. In our research services, as we look at that across chemistry, biology, translational science and clinical, we're also seeing growth. Now, our focus is very clearly, you know, to look to accelerate that growth in order to compensate for the singular issue that we're facing with our largest large molecule customer.

if we strip out the impact of this single product and and look at what is happening across our business model,

Growth. And what is encouraging is that growth? You know, is a is a cross, uh, division. So we take it. The impact out of our manufacturing platform. We are seeing increased capacity utilization both in small molecules and in large molecules and we're seeing that translate in the quarter, you know, in into into some growth, in our Research Services, as we look at that, across chemistry biology, um translational science and clinical. We're also seeing growth now. Our focus is very clearly you know to look to accelerate that growth in all.

In order to compensate for the singular issue that we're facing with our with, our largest large molecule customs.

Peter Bains: That will be the focus going forward. Our growth can be broad-based, and I think this is a strength of Syngene's model in that it has diverse capabilities across a wide range here. Looking for growth and filling up, you know, pipeline and capacity in small molecules and large molecules and looking to accelerate the growth that we're seeing in our research services. Very clearly that is the focal point of management going forward.

Um, and that will be the focus going forward, and our growth can be broad-based. And I think this is a strength of sings model in that it has diverse capabilities across a wide range here. So looking for growth and filling up, uh, you know, Pipeline and capacity in small molecules and large molecules and looking to accelerate the growth that they're seeing. In our Research Services,

So very clearly that is the focal point of of of management going forward.

Kunal Dhamesha: Sure. Second question for Deepak. Of the INR 70 crore impact on the new labor code, how much of this impact we expect to see continuing in the future quarters?

Sure and the second question for the talk of the 7 crash uh on the new data code uh how much of the impact we expect to see continuing in the future quarter.

You're talking about the exception item, you know.

Deepak Jain: You're talking about the exceptional item, Kunal?

Kunal Dhamesha: Yes. Exceptional item. Yeah. Yeah.

Deepak Jain: Kunal, the way it is, as you know, the labor code has just got introduced. The institute has given us a guidance of, you know, taking that provision into play. The notifications are still coming out. We are looking and keeping ourselves close to it. As it progresses, as it evolves, we will get to update our financials accordingly. It's early days. We've taken places the best judgment right. What we have right now.

Yes, exception like yeah, yeah so so so Canal. Uh the way it is as you know the labor code is just got introduced the The Institute has given us a guidance of you know, taking that that provision into play. The notifications are still coming out. We are looking and keeping ourselves close to it as it. Progresses as it evolves, we will get to update our financials accordingly, it's early days, but uh, we've taken bases, the best judgment, right? We what we have,

Right now.

Huh.

Sure. Uh, thank you and all the best. Thank you. Thank you.

Kunal Dhamesha: Sure. Thank you and all the best.

Next question is from the line of sham shiran from Goldman Sachs. Please go ahead.

Deepak Jain: Thank you.

Operator: Thank you. Next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead.

Shyam Srinivasan: Hi. Just thank you for taking my question. Just the first one on the revenue splits between CRO, CDMO. If you could give us the broad percentages and also the year ago, so, and maybe some qualitative color around. I'm assuming CRO is growing, so just some qualitative color around what's driving that growth.

Hi. Um just thank you for taking my question, just the first 1 on the revenue splits between cro cdmo, if you could give us the uh broad percentages and also a year ago. So and maybe some qualitative color around. Uh I'm assuming crows growing so just some qualitative color on. What's driving that growth.

Deepak Jain: Sure. We had two-third, one-third is what Peter had called out earlier as well, that that's the split that we have. It's broadly the same as what we had last year as well. It was around 65, 35. We're kind of holding almost similar. The point, Shyam, is the fact that because of that one product impact, you know, we're seeing a change in a bit of the business mix. If we were to look at or strip that out, as Peter was mentioning earlier, the underlying business continues to grow and continues to grow in a steady progress. To that extent, you know, the baseline and foundation seem strong right back.

Um, so we had 2, third 1 third is what Peter had called out earlier as well. That that's the split that we have. It's it's broadly the same as what we had last year as well. It was 7. Uh, it was around, 65 35, so we kind of holding almost similar.

The the point. Um, uh, sham is the fact that

Because of that 1 product impact. You know, we seeing a change in a bit of the business mix, but if we were to look at or strip that out as Peter was mentioning earlier,

The underlying business continues to grow and continues to grow in a steady progress.

So, so that to that extent, you know, the Baseline and Foundation seems strong right now.

Shyam Srinivasan: Deepak, would be helpful because it's... If I use, how do we strip the razor at double-digit growth? Very difficult, right?

Will be helpful because it's if I use, uh, how do we step and double digit growth uh because very difficult right? Because we're not sharing what that call out is.

Deepak Jain: Sure.

Shyam Srinivasan: Since you're not sharing what that call-out is.

Sure. Uh know. So I understand that Sam. Uh, so the way I would call it out is its high single digit low double digits is where I would keep it in the ballpark.

Deepak Jain: Sure. No, I understand that, Shyam. The way I would call it out is it's high single digit, low double digits, is where I would keep it in the ballpark. If I was to strip out the growth of-

So, if I was to strip out the growth of you're talking about x x x, a special opportunity X, the special opportunity, you're calling out the growth in CC terms is what sorry?

Shyam Srinivasan: You're talking about ex the special opportunity, ex the special opportunity. You're calling out the growth in CC terms is what? Sorry.

Deepak Jain: If I was to exclude the one-off product, right, that is impacting and giving us the headwinds, the rest of the business is growing in high single digits, low double digits in constant currency terms.

If I was to exclude, the 1-off product, right? That, that is impacting and giving us the headwinds. The rest of the business is growing in high. Single digits, low double digits. In in constant currency terms,

Okay.

That's helpful. And

And, and you don't want to give some color around.

Shyam Srinivasan: Okay, that's helpful. You don't want to give some color around CRO versus CDMO there, excluding that business, which has grown faster-

Deepak Jain: Excluding CDMO business. Excluding CDMO business also we are growing very well.

Shyam Srinivasan: No, excluding the one. No, Deepak. Excluding that one-off.

Yeah, over to CDM over there. Excluding that business, which is going. Including cdmo business. Excluding cdmo business. Also, we are growing with, including the 1. No, no, people excluding that 1 off. I'm just saying if you can slide the CDM also, how has the cdmo business done?

So, I'm

Deepak Jain: Uh-huh.

Shyam Srinivasan: I'm saying if you can slice the CDMO also, how has the CDMO business done?

Deepak Jain: I'm only able to give you right now, Shyam.

I'm only being I'm, I'm only able to give you right now, sham? Okay. The the growth as a total business, the growth splits by 3 m on cro. I'm not at the position to say that right now.

Shyam Srinivasan: Okay.

Deepak Jain: The growth as a total business. The growth split by CDMO and CRO, I'm not at the position to say that right now.

Shyam Srinivasan: Got it. Helpful. Second question just on the guidance. I presume this is a constant currency guidance, right? Sorry if I'm

Got it helpful. Uh, and second question, just on the guidance I received this is constant currency guidance, right? Sorry. If I'm saying that the 3 to 5% decline now. Yes, yes, yes.

Deepak Jain: Yes.

Shyam Srinivasan: At the 3% to 5%.

Deepak Jain: Yes.

Shyam Srinivasan: decline now.

Deepak Jain: Yes.

Shyam Srinivasan: Right? Okay.

Deepak Jain: Yes.

Shyam Srinivasan: It still implies a pretty weak few 4Q, I would imagine. I don't know how do we use the rupee conversion there, but it still would mean a, my guess, sequential decline in Q4, which is not typically how it pans out historically.

Yes, right. Okay, yes. So, it still implies a pretty weak few 4 q. I would imagine, I don't know, how do we use the rupee conversion there? But it still would mean my guess my guess sequential decline in quarter 4, which is not typically,

Uh, how it pans out historically.

The rupee has been fairly volatile. Uh, you know, what was the right?

Sorry, sham.

Deepak Jain: The rupee has been fairly volatile, you know.

Shyam Srinivasan: What would drive-

Sham, it'll it'll be deeper so I I don't know.

Shyam Srinivasan: What would drive-

Deepak Jain: Sorry, Shyam.

Peter Bains: Shyam, it'll be.

Shyam Srinivasan: I was completing, Deepak. I don't know. Yeah.

Peter Bains: Shyam, we will expect the single product impact to continue in Q4. We will be looking to offset that with the growth that we're seeing in the rest of the business, which Deepak has characterized.

Yeah. Um, we we will expect the single product impact to continue in Q4 and we will be looking to offset that with the growth that we're seeing and the rest of the business, which

DAC, is characterized.

Shyam Srinivasan: Got it. Just lastly, again, maybe since we don't know the percentages exactly, when I just punched in the two-third, one-third for CRO, even CRO has shown weakness like flattish kind of growth YOY. You know, I thought the narrative was CRO is improving, biotech funding improving. Just some qualitative around what is happening to the discovery business.

Got it. Uh and just lastly uh again maybe. Since we don't know the person which is exactly when I just punched in the 23rd 1/3 for cro. Even cro is shown weakness like packaged kind of growth. Why why? So you know has I I thought the narrative was C is improving by the funding improving. So just some qualitative around, what is happening to the Discovery business.

No, so the, the entire Research Services business that we spoke of right is growing year on year.

Deepak Jain: No. The entire research services business that we spoke of, right, is growing year on year, right? I probably do not understand the modeling that you have. Maybe we should have a look at that. The point remains my research services is growing and doing well. Our investments in chemistry, biology, translation are putting us on a good steady growth path.

Right. So I probably uh, do not understand the the modeling that you have. Uh, maybe we should, uh, we should have a look at that but but the point remains, is my Research Services is is growing and doing doing well, our investments in chemistry biology translation. Uh, have are are putting us on a good steady growth part.

Okay. Thank you. Thank you. And all the best. Thanks.

Thank you.

Shyam Srinivasan: Okay. Thank you. Thank you, and all the best.

Deepak Jain: Thanks.

Take a next question from the line of alankar Guru from kotak. Institutional equities, please go ahead.

Operator: Thank you. Take our next question from the line of Alankar Garude from Kotak Institutional Equities. Please go ahead.

Alankar Garude: Hi, thank you for the opportunity and good afternoon, everyone. The first question, when we had our Q2 call in November, you had mentioned a mid-single-digit top-line growth guidance in constant currency terms, and now you're talking about a 3% to 5% decline. Just trying to understand, I mean, in the last few months, the funding environment has actually improved. What exactly has driven this sharp change in the guidance for FY26?

Terms and now you're talking about a 3 to 5% decline. So, just trying to understand. I mean, in the last few months, the pending environment has actually improved. So, what exactly has driven this sharp change in the guidance for Phi 26?

Peter Bains: Alankash, as I said, you know, there's not much of a change in the way we had our view to the business beyond that one single product. The base business and the underlying growth that we spoke about continues to remain robust. It is more than expected impact that we're getting from the one single large molecule product that's actually having an adverse impact into what we had guided and therefore needing for us to make that change in guidance.

Deepak Jain: Alankash, as I said, you know, there's not much of a change in the way we had our view to the business beyond that one single product. The base business and the underlying growth that we spoke about continues to remain robust. It is more than expected impact that we're getting from the one single large molecule product that's actually having an adverse impact into what we had guided and therefore needing for us to make that change in guidance.

So, as I said, you know, there's not much of a change in the in the way, we had our view to the business beyond that 1 single product, uh, the base business and the underlying growth that we spoke about continues to remain robust.

It is it is more than expected impact that we getting from the 1 single large molecule product. That's actually having an adverse impact into what we had guided and therefore needing for us to make that change in guidance.

Alankar Garude: Were we expecting, Deepak, any sales from this molecule in the second half, which are not going to come by, I mean, which were not there in Q3 and will not come in Q4?

So, where do we expecting deeper, any sales from this molecule in the second half, which are not going to come by, uh, in 3, I mean, which were not there in 32, and they will not come in fourth quarter.

We were expecting a certain Quantum of volumes to come into our from the product but it's been slower than what we expected.

Peter Bains: We were expecting a certain quantum of volumes to come into us from the product, but it's been slower than what we expected.

Deepak Jain: We were expecting a certain quantum of volumes to come into us from the product, but it's been slower than what we expected.

Alankar Garude: Got it. Just one clarification on that. When Peter was answering the earlier question regarding this product, I think he missed out a few things. Can you please help repeat that? I think Peter said expect impact to continue in the coming quarters. Did I hear that correctly?

For it and just 1 clarification on that. Uh, when Peter was answering the earlier question, uh, regarding this product. I think he's been left out a few things so so can you please help repeat that? I think Peter said expect impact to continue in the coming quarters? We are there correctly?

Yes, you heard that correctly. I mean, and we've now captured that, you know, in the year and guidance, we do expect the impact of this

Peter Bains: Yes, you heard that correctly. I mean, we've now captured that, you know, in the year-end guidance. We do expect the impact of this single product, you know, to play out in the coming quarters.

single product, you know, to play out in the coming quarters.

Quarters. Okay. Uh, got it.

Alankar Garude: Quarters. Okay. Got it. The second question is, can you comment on both the two underutilized facilities, in terms of what kind of traction you are seeing, what kind of discussions you are having, both Bangalore as well as Unit Three. Also for the US facility, is it on track to come operationalized in Q4?

The second question is can you comment on both the 2 and utilize facilities in terms of, in terms of what kind of fraction you are seeing? What kind of discussions we are having both manual as well as unit 3, and also, for the US facility. Is it on track to how much operationalize in the fourth quarter?

Yes, um, like I'll I'll take that 1. So,

Peter Bains: Yes. Alankar, I'll take that one. In Bangalore, the small molecules facility, you know, we are seeing capacity utilization increase and translate into growth this quarter. You know, our pipeline is building, the ongoing products can progress there. If, you know, if they progress, they can scale as well. We're encouraged by, you know, the steps that we've taken translating into this improvement in capacity utilization and growth. Obviously our management focus here will be to strengthen that, and we're working hard to build, you know, to build that pipeline and accelerate utilization. In the Bangalore large molecules, again, you know, we are seeing growth. Capacity utilization is improving and again, we're looking to strengthen and accelerate that.

In Mangalore, The small molecules facility, uh, you know, we are seeing capacity utilization, increase and translate into growth. This, this quarter, uh, you know, our pipeline is building, um, and the ongoing products can progress there and if, you know, if they progress, they can scale as well.

So we're encouraged by, you know, the the steps that we've taken translating into this Improvement in capacity utilization and growth. And obviously a management Focus, here will be to strengthen that and we're working hard to build.

You know, to build that Pipeline and accelerate utilization.

in the Bangalore large molecules um again you know we are seeing growth um capacity utilization is improving and again we're looking to strengthen and accelerate that

Peter Bains: You know, we have installed as part of our CapEx programs, a sterile fill-finish line there. That strengthens our service offering that we now move, you know, from drug substance into drug product. That will enhance our offering there. Looking to build on the early traction that we're seeing and accelerate that. With regard to Bayview, as I said in my opening remarks, you know, the qualification of equipment and the facility is now complete. We're finishing with the team to, in order to prepare, you know, to begin operations in that, you know, in the coming quarter or so. Clear focus on strengthening the growth that we're seeing by, you know, building the pipeline and advancing the assets that we have in play now.

You know, we we have installed as part of our capex programs, a sterile field, Finish Line there, uh, strengthens our service offering that we now move, you know, from drug substance into drug product and that will enhance our offering there. So looking to build on the early traction that we're seeing and accelerate that with regard to Bay View. Um, as I said, in my opening remarks, you know, the qualification of equipment. And, um, and then the facility is now complete that that we are finishing with the team to, in order to prepare, uh, you know, to begin operations in that, you know, in, in the, in the coming quarter. So,

So clear, focus on strengthening the growth that we're seeing by, you know, building the pipeline, in advancing the assets that we have in in play now.

Alankar Garude: Perfect. Just one final question, if I may. A completely hypothetical question, given that you mentioned about this impact continuing in the key product for the next few quarters. Our original Bangalore biologics facility also would be relatively underutilized. When it comes to having discussions regarding both Unit Three as well as the original Bangalore facility, I mean, is there any preference which you have or clients have when it comes to starting new projects among either of these two facilities?

Okay. And this 1 final question if I met a slightly hypothetical question given that you mentioned about this impact continuing in the key product for the next few quarters are original Bangalore biological facilities also would be relatively underutilized so when it comes to having discussions regarding both the unit 3 as well as the original Bangalore facility and is there any reference which you have or clients have? Uh when it comes to starting new projects among either of the issued facilities?

I like in my answer to that question would be that, you know?

Peter Bains: Alankar, my answer to that question would be that, you know, a part of the reason in acquiring the US facility was to give us this flexibility. We wanted to put a foothold in the United States as a strategic market opportunity and retain our, you know, our position here in Bangalore. This gives us flexibility, you know, to talk to our customers about, you know, the versatility that might suit what they want to do. We'll definitely look to leverage that flexibility and versatility going forward.

A part of the reason in acquiring the US facility, was to give us this flexibility. We wanted to put a foothold in the United States as a strategic Market opportunity and retain our, you know, our our position here in Bangalore and this gives us flexibility, you know, to talk to our customers about, you know, the versatility that might suit what they want to do. So we'll definitely look to leverage that flexibility and versatility going forward.

Okay, sir. Uh, that's it from my side. Thank you.

Thank you.

Alankar Garude: Okay, sir. That's it from my side. Thank you.

Next question is from the line of giraffe from DSP, mutual fund. Please go ahead.

Operator: Thank you. Next question is from the line of Chirag Dagli from DSP Mutual Fund. Please go ahead.

Alankar Garude: Yes, thank you for the opportunity. This single product.

Chirag Dagli: Yes, thank you for the opportunity. This single product.Where are we in FY26 on a run rate basis versus a more normalized number? You did indicate at the time of signing of this contract that this was a cumulative $500 million 10-year contract. I'm just assuming $50 million was a more normalized run rate for this one. In FY26, where are we versus that normalized run rate for that product?

Chirag Dagli: Where are we in FY26 on a run rate basis versus a more normalized number? You did indicate at the time of signing of this contract that this was a cumulative $500 million 10-year contract. I'm just assuming $50 million was a more normalized run rate for this one. In FY26, where are we versus that normalized run rate for that product?

Thank you for the opportunity, sir this single product. Um, where are we in? Phi 26 on a run rate basis versus a more normalized number. Uh, you did indicated the time of signing of this contact that this is a cumulative 500 million 10 year contract. Um, I'm just assuming 50 million was a more normalized run rate for this 1 uh, in Phi. 26, where are we versus that normalized? Um,

Sunday for that product.

so um, so thanks for the question if you

Deepak Jain: Chirag, thanks for the question. If you look at what we've spoken about this product, when we contracted on this product, it was a 10-year program with the potential to get to $500 million. We also did call out that in the first few years, we were able to deliver better off than a typical average, and that was driven largely by the fact that it's a new product. It will need to go into the market. The pipelines on distribution will need to be filled up, et cetera. Now, once that happened, from the beginning of the year, we've been speaking about the fact that we are seeing now an inventory correction. More importantly, if you look at the public announcements on the product, it's also talking about a product issue as well.

If you look at what we've spoken about this product, when we when we contracted on this product, it was a 10-year program with a potential to get to 500 million dollars. We also did call out that in the first few years, we were able to deliver better off than a typical average and that was driven lastly, by the fact that it's a new product, it will need to go into the market. The pipeline's on distribution will need to be filled up Etc.

Now.

Deepak Jain: Therefore, we do not know how it's panning out. I would not want to comment much beyond whatever is there in the public domain. They are a listed company. They will come out with their own views to it. Beyond that, the way we look at it is we are seeing headwinds coming in for our supply of the product to them. Right now we see that continuing for a few more quarters.

Once that happened from the beginning of the year, we've been speaking about the fact that we are seeing now, an inventory correction. But more importantly, if you if you look at the public announcements on the product, it's also talking about a product issue as well. And therefore, we do not know how it's spanning out. I would not want to comment much Beyond whatever is there in the public domain. Uh, they are a listed company. They will come across with, they will come out with their own views to it. But beyond that, the way we look at it is we are seeing headwinds coming in for our supply of the product to them. And right now we see that continuing for a few more quarters.

Has a wallet share in that products, remained stable.

For that product for the clients.

Chirag Dagli: Has our wallet share in that product remained stable for that product for the clients?

Peter Bains: I mean, it's not our position to comment on...

Chirag Dagli: Sure.

Peter Bains: the client. You know, our collaborating partner here, obviously we are talking to them. Let me be a little bit clearer. The product is Librela and our partner is Zoetis. What I would do is point you in the direction of their website, you know, for information on what they're doing.

Chirag Dagli: Sure.

I mean, it's it's not our position to comment on the client, um, you know, our collaborating partner here. Obviously, we are talking to them. Let me be a little bit clearer. The product is Leah, and and our partner is the latest. What I would do is

once you're in the direction of their website, um, you know, for for information on what they're doing,

Hi, understood and just on the following product, uh, or you know, incremental products on that partnership. Uh, any color around that.

Chirag Dagli: Understood. Just on the follow-on product, or, you know, incremental products on that partnership, any color around that?

Peter Bains: I mean, we have a, you know, an open dialogue and an ongoing dialogue with our collaborator there, and they're exploring other opportunities, and we'll update on that as we make progress and mature any discussions.

I mean, we we have a, you know, an open dialogue and an ongoing dialogue with our collaborators there and and and are exploring other opportunities. And we'll update on that as, as we make progress and mature any discussions.

Chirag Dagli: Understood. Just a bit on the environment for, you know, our services business. I understand this is a lot dependent on the funding environment. Just how are you seeing that environment as we get into this calendar year?

Understood and just a bit on uh the the environment for uh, you know, our services business. I I understand this is a lot dependent on the uh funding environment. Just how are you seeing that environment? Are we getting to this uh calendar year?

Peter Bains: Sure. I think we touched on this in the last quarter, that there were some signs that the, you know, the venture capital funding into biotech, which has had a pretty long winter, was beginning to thaw. I think what we see is that trend continuing. I think there's some signals that that's accelerating a little bit. That's, you know, obviously a, you know, an encouraging sign. Syngene, you know, has a strong exposure to biotech companies, and, you know, that would be welcome if that continues. That will feed into biotechnology companies and provide further opportunities for Syngene to collaborate to support.

Sure, um, I think and we touched on this in the last quarter that there were some signs that the, you know, the Venture Capital funding into biotech, which has had a pretty long winter was beginning to fall. I think what we see is that Trend continuing, um, and I think there's some signals that that's accelerating a little bit. Um, and that's, you know, obviously a, you know, an encouraging sign and the

singing, you know, has a strong exposure to to buy tech companies and, you know, that would be welcome if that continues and that will feed into into biotechnology companies and provide further opportunities for singing to collaborate to support.

Peter Bains: I think we are, of course, watching this, you know, at present, I think we see an improving trend in that regard.

So, I think we, we, we'll look at where, where, of course watching this but, uh, you know, and at present, I think we see a, an improving friend in the in, in, in that regard.

Wonderful, thank you.

Thank you.

We'll take our next question from the line of NHA.

Chirag Dagli: Understood. Thank you.

Yeah, please go ahead.

Operator: Thank you. We'll take our next question from the line of Neha. Please go ahead.

[Analyst]: Yeah, thanks for taking my question. If I were to strip out this, you know, this product, this special product, how should I think about growth for fiscal twenty-seven with for the rest of the business? Should we assume the high single digit, low double-digit growth that you mentioned, constant currency accelerating to more like mid, you know, mid-teens, high teens? Would that be a fair assumption?

For taking my question, uh, if I were to, uh, strip out this um, you know, uh, this product, this special product, how should I think about growth for fiscal 27 for, uh, for the rest of the business? Should we assume the high single digit, low, double digit growth that you mentioned constant currency accelerating to more. Like, you know, mid teens items would that be a fair assumption?

Deepak Jain: Neha, we typically guide towards only the year, and we can right now restrict our comments only for this year. Somewhere around in April-May time horizon is when we come and give a guidance for the coming year, and that's the time we will speak more detail around the guidance for the coming year. It won't be right for me to right now give any commentary or color on the guidance for FY27.

May uh we typically guide towards only the year and we can write now restrict the comments only for this year somewhere around. In April May time Horizon is when we come and give a guidance for the coming year and that's the time we will speak more detail around, the guidance for the coming year, it won't be right for me to right now, give any commentary or color on the guidance for 427.

[Analyst]: Is there any color that we can give on probably trends improving in the rest of the business, you know, to give confidence on 27 growth, if not a formal guidance? I understand that you'd probably prefer to give that, you know, after Q4. We are either, you know, what we are seeing probably in CRO or the CDMO business to give us confidence that things could improve, going into FY27 for the rest of the business.

Probably Trends including in the rest of the business, you know, to give confidence on 27th growth, if not a formal guidance, I understand that you probably prefer to give that, uh, you know, after fourth quarter, uh, you know, either, you know what we are seeing probably in cro or to TDM more business to give us confidence. That things could improve going into Phi 27 for the rest of the business.

Sure, nahal, let me um let me take that 1. So as I think, you know, both the aipac and I

Peter Bains: Sure, Neha. Let me let me take that one. As I think, you know, both Deepak and I, you know, we've commented in earlier questions, notwithstanding this single product impact, you know, we are seeing growth across the wide range of the Syngene model. We're seeing growth in the manufacturing business, small molecules and large molecules, and we're seeing growth in the research services spanning chemistry, biology and biotherapeutics, and translation and clinical sciences. Deepak's given an indication of what that underlying growth looks like, you know, in high single, low double digits. Of course, you know, that is the focus now is to accelerate that growth. You know, across all fronts, you know, and pick up on this, you know, these encouraging signs of growth that we have and accelerate that.

S, you know, we we've commented in in earlier questions.

Notwithstanding this single product impact. You know, we are seeing growth across the wide range of the singing model. So we're seeing growth in

the manufacturing business, small molecules and large molecules and they're seeing growth.

Peter Bains: We'll be giving formal guidance in for 2027 in our Q4 results. We're very focused on looking to build on and accelerate the growth that we're seeing across the diverse service platforms that we have. It's really a strength of Syngene that we have this diverse platform, and of course, we now have to push on that to compensate, you know, for the headwinds that we're facing with this large single product issue.

In the recent Services is spending chemistry biology and bio Therapeutics and translation and clinical Sciences. Deepex given an indication of what that underlying growth looks like um you know, with high single low double digits. And of course you know, that is the focus now is to accelerate that growth, you know, across all fronts. Um, you know, and pick up on this, you know, the these encouraging signs of growth that we have and accelerate that and then we'll be giving formal guidance and for for 27 in our fourth quarter results but we're very focused on looking to build on and accelerate the growth that we're seeing across the diverse, um, its service platforms that we have it's really a strength of singing that we have this diverse platform and of course, we now have to push on that to compensate, uh, you know, for the headwinds that we're facing with this large.

Single product. Um, issue.

Deepak Jain: Yeah. If I may add, you know, we continue to invest in the business, right. We continue to invest in CapEx. We've spoken about in the previous quarters as well, and we continue to speak about in this quarter as well, right. As we enhance our capabilities and capacities, you know, as and when the modalities and technology change, we continue to upgrade ourself. We continue to invest in the business. We continue to have a strong balance sheet. The underlying business growth continues to remain strong.

Yeah, if I may add um, you know, we continue to invest in the business, right? We continue to invest in capex. We we spoken about in the previous quarters as well and we continue to speak about in the this this quarter as well, right? As we enhance our capabilities and capacities, you know, as and when the modalities and, and, and Technology change. We continue to upgrade ourselves. So we continue to invest in the business. Uh, we continue have a strong balance sheet and the underlying business growth continues to remain strong.

[Analyst]: Thanks for that. You know, given the lumpiness of this asset and you invested in the Bangalore facility and now in the US facility, do we see anything in the pipeline that we have, you know, with our customers, in terms of other large products that could probably reduce our dependence on this one product when it comes to, you know, revenue growth? Just reduce the dependence on the volatility related to this product. Do you have any visibility on that coming through, let's say, in the next month, 18 months?

Uh, thanks for that, uh, you know, given the lumpiness of this asset and give we've invested in the Bangalore facility. And now, in the US facility, do we see anything in the pipeline that we have, uh, you know, with our customers? Um, in terms of other large products that could probably reduce our dependence on this 1 product, when it comes to, you know, uh, Revenue growth, just to reduce the dependence on the volatility related to this product. Do you have any visibility on that coming through? Let's say, in the next month, 18 months,

Peter Bains: Yes. You know, that is very clearly a focus, and our goal is to build the pipeline, translate that into capacity utilization across all our facilities. Bangalore and Bayview are clearly, you know, two of those facilities. What we're seeing is some early and encouraging signs, both in business coming in, providing the basis of the growth that we've described. You know, we're working on strengthening those pipelines so that we can accelerate that. That's very clearly a focus.

Yes. Uh, you know, with that is very clearly, a focus. And our goal is to build the pipeline translate that into capacity utilization across all our facilities. It's a Bangalore and they view clearly, you know, 2 of those facilities. But what we're seeing is,

some early and encouraging signs both in business coming in, providing the basis of the growth that we've described and, you know, we're working on strengthening those pipelines so that we can accelerate that

That's very clearly a focus.

We'll take our next question from the line of Manoj bahiti from car.

Please go ahead.

Operator: We'll take our next question from the line of Manoj Bahety from Carnelian Asset Management. Please go ahead.

Hi, good afternoon. Thanks for taking my question. Uh, so I have a couple of questions like, uh,

Manoj Bahety: Hi. Good afternoon. Thanks for taking my question. I have a couple of questions. Like, first one is on, especially on the CDMO, the way we have expanded the capacity and done the capital allocation. Just wanted to understand what's the plan for capacity ramp up. Is there a urgency in terms of getting the capacity utilization also in place? When I compare peers who are in CDMO, who have done the capacity addition, especially the way the opportunity is coming to India, we are seeing like a significantly faster and much bigger numbers in terms of expectation of capacity utilization.

first 1 is, uh, on especially on the serial mode, the way we have expanded the capacity and then the capital allocation

Manoj Bahety: It seems like, I'm not interested in exact numbers, but in terms of the direction of the growth going forward, looking at the kind of capacity in India as well as in US, where we have put in, like next two, three years, are we seeing some meaningful upside or market leading growth on account of the capacity which we have put in?

Uh uh, in terms of getting the capacity utilization also in place because when I compare a year who are in uh, cdmo who have done the capacity, uh, Edition, uh, especially the way the opportunity is coming to India. We are seeing like a significantly faster and much bigger numbers in terms of expectation of capacity utilization. And it's still like, I'm not interested in exact number. But in terms of the direction of the growth going forward, looking at the kind of capacity in India as well as in us where we have put in like next 2 years. Are we seeing some meaningful upside or Market leading growth on account of the capacity which we have put in?

Peter Bains: Manoj, the answer is yes. I mean, that's very clearly, you know, a key priority. Has the performance in Bangalore met, you know, expectations as we discussed? Not yet, but that is what we're working on. As I said in my opening comments, you know, we are seeing some traction. We are seeing capacity utilization increase. That's very encouraging. Of course, we need to accelerate that, and that is what we're working on. You know, we're looking to strengthen the pipeline and the delivery and accelerate that utilization. The same holds true, you know, for the Bangalore facility, large molecules. Again, we are seeing now some early pickup in traction and utilization and growth, and we're going to build on that.

So manage the, the, the, the, the the answer is, yes. I mean, that's very clearly, uh, you know, a, a key priority, um, as the performance in Mangalore, you know, expectations as as we discussed, not yet. But that is what we're working on. And, as I said, in my opening comments, you know, we are seeing some traction, we are seeing capacity, utilization increase, that's very encouraging. Of course, we need to accelerate that and that is what we're working on. And, you know, we're looking to strengthen the pipeline and the delivery and accelerate that utilization.

Peter Bains: you know, obviously in Bayview, we're completing, you know, the formalities to get, you know, that facility licensed and cleared. We've built the management team, we're ongoing, you know, many dialogues to look at, starting to fill that facility up. You, you will have also seen that we've appointed a new head of manufacturing, Dr. Rohtash Kumar, who comes with an awful lot of experience, both in large molecules and small molecules in Europe, in the United States, and he's relocated to here in Bangalore to lead and drive that, you know, in the next chapter of our CDMO platforms. We're very focused on it. We've got early and encouraging signs, we're, you know, strengthening the focus on accelerating that.

And the same holds true, you know for the Bangalore facility large molecules and again we are seeing now some early pickup in traction and utilization and growth and we're going to build on that. Um you know and uh you know obviously in Bay View we're completing um you know the the the formalities to get um you know that facility license and cleared we've built the management team and we're

Ongoing you know, many dialogues to look at uh starting to fill that facility up.

You, you will have also seen that we've appointed a new head of of manufacturing Dr. Rohtash Kumar, who comes with an awful lot of experience, both in large molecules and small molecules in Europe in the United States. And he's relocated to here in Bangalore to lead and drive that, uh, you know, in in, in the next chapter of our of our of our cdmo platforms.

So we're very focused on it. We've got early and encouraging signs and we're, you know, strengthening the the focus on accelerating that.

Manoj Bahety: Thanks for that response, Peter. Still if I, this, the way you mentioned that even if I take out this one-off large product, you mentioned that there is a high single digit growth across the business, which we believe that a larger portion of the growth may be contributed by CRO. Still CDMO, excluding this single large product. Still the growth visibility is not there, and as investors, we are not getting any direction in terms of the direction and magnitude of the growth also going forward. Help us getting at least some color on the direction and magnitude of the growth going forward, that will be really helpful.

Thanks for, uh, that response Peter. But still, if I uh this uh, the way you mentioned that, even if I take out this, uh, 1 of large products, you mentioned that there is a high single-digit growth across the business, which we believe that the larger portion of the group may be contributed by cro and still here. More experienced this single, large product is still the growth visibility is not there. And as the investors, we are not doing getting any direction in terms of the direction and magnitude of the group also going forward. So, uh, help us, uh, getting at least some color on the direction and magnitude of the growth going forward, that will be really helpful.

Peter Bains: Sure. I mean, I understand the question, Manoj. I understand, you know, that your expression of frustration. At this point, we can't give any quantitative guidance on that. You know, when we come to the full year, you know, we'll have a clearer picture. I can only emphasize that, you know, we believe these facilities, you know, will have high potential. The capacities are there. You know, the capabilities and technologies are good. You know, under new leadership and with the, you know, amplified focus. Plus, I think, you know, very clearly some of the early and encouraging signs that we're seeing that I've discussed. You know, we're looking to accelerate that, you know, quite clearly to fill the capacities which have substantial potential to drive revenue going forward.

Sure. I mean, I understand the question manage, I understand, you know, the, your expression of of frustration at this point we can't give any competitive guidance on that. You know, when we come to the full year, you know, we'll have a clearer picture. I can only emphasize that, you know, we believe these facilities, you know will have high potential, the capacities are there, uh you know, the capabilities and Technologies are good, um, you know, under new leadership and with with the you know, Amplified Focus plus I think you know very clearly some of the early and encouraging signs that we're seeing that I discussed uh you know we're looking

looking to accelerate that, uh, you know, quite clearly to fill the capacities, which have substantial potential to drive Revenue going forward,

Got it. Oh my second question is on the CR side like looking at the improving environment on the biotech funding.

Manoj Bahety: Got it. Now, my second question is on the CRO side. Like, looking at the improving environment on the biotech funding, which we were expecting that CRO will also start coming back to faster pace of the growth. Looking at your overall number, that thing is still not visible. Is there something which is still preventing at a macro level, the faster pace of growth? Or, we as an organization are growing slower vis-a-vis our peers. How do you read this?

We were expecting that. We all will also start coming back to faster pace of the growth. But looking at your overall number,

Uh, that thing is still not visible. Is that something which is still preventing uh, uh, at a macro level the faster pace of growth or, uh, we as an organization are growing slower with, with our peers. How do you read this?

so I I, you know, I think the macro circum, the macro environment, you know,

Peter Bains: I, you know, I think the macro environment, you know, is broadly favorable. I mean, I think we've spoken about, you know, encouraging signs of return on venture capital into biotech. You know, in the mid and long term, the trends are in continued outsourcing by Big Pharma of discovery services. I think, you know, Syngene's platform is well placed to capitalize on that. You know, investments that we've made in chemistry that I spoke about. You know, we're looking to build out in biology, not just in discovery biology, but leverage, you know, what we think is, you know, platform capabilities and differentiated platform capabilities in India on biotherapeutics. You know, certainly in translational sciences and in clinical trials. You know, we're seeing again, in both of those areas, those encouraging early signs.

is is broadly favorable. I mean, I think we've spoken about, you know, encouraging signs of return and Venture Capital into biotech. You know, the mid and long-term the trends are and continued Outsourcing by big farmer of Discovery services. And I think, you know, sings platform is well placed to capitalize on that and, you know, Investments that we've made in chemistry that I spoke about, you know, we, we're looking to build out in biology, not just in Discovery biology, but Leverage

You know what we think is, you know, um, platform capabilities and differentiated platform capabilities in India on bio Therapeutics.

Peter Bains: You know, one of those we touched on last Q was the award of our first global clinical trial recruiting here in India and in the US. That continues to make progress, but there are timelines here. In this Q, you know, we've received the expert committee approvals to go forward, you know, and we'll be now looking, you know, at site selection and patient recruitment. These things do have a timeline before they can really accelerate. Again, you know, our focus will be on leveraging the diverse capabilities that we have, you know, in chemistry, and we spoke about those investments in biology, you know, and in translational clinical sciences, and look to accelerate the growth that we have, which, you know, Deepak's advised underlying, you know, is in that high single digit, you know, low double digit.

And you know certainly in translational sciences and in clinical trials, you know, we're seeing again in both of those areas, those encouraging early signs and you know, 1 of those we touched on last quarter was the award of our first global global clinical trial recruiting here in India and in the United States and you know, that continues to make progress but there are timelines here. So in this quarter, you know, we've received the expert committee approvals to go forward, uh, you know, and we'll we'll be now looking, you know, at site selection and patient recruitment but these things do have a a timeline before they can really accelerate again.

You know, our Focus will be on leveraging the diverse capabilities that we have, you know, in chemistry and we spoke about those investments in biology, uh, you know, and in translational kind of Sciences and look to accelerate, uh, the growth that we have which, you know, deep access advised underlying, you know, is in that high, single digit, you know, low double digit. And, of course, that's uh, you know, for us to build that. And, you know, and accelerate that further,

Peter Bains: Of course, that's, you know, for us to build that and, you know, and accelerate that further.

Manoj Bahety: Got it. One last question I do have. What's the internal plan to mitigate the risk on this single large molecule? Like, you have highlighted that earlier it was inventory correction which the customer was taking, and also there are some product specific issues. Internally, how we are preparing ourselves to mitigate the impact of this going forward? Secondly, how long the impact will be there on Syngene of this single large molecule? Can we expect that by Q4 it will be over? Or do you believe that it will continue for next few quarters?

Project and 1 last question I do have. So what's the internal 9 to mitigate the risk on this single large molecule? Like you have highlighted that earlier? It was the inventory correction, which the customer was taking and uh also there are some productive specific issues. So internally how we are preparing ourselves to mitigate the effect of this going forward. And uh, and uh, speaking with how long, uh, the impact will be there on single of this single large molecule can be expected that by 4 quarter. It will be over or you believe that it will continue for the for uh next few quarters

Peter Bains: As, you know, I think we covered in some earlier questions in terms of how long do we see this impact lasting. We see this playing out over the next few quarters. You know, it's clearly going to play into Q4, and it will play in, I think, into the, you know, a couple of quarters in 2027 before it plays out. Now, you know, how long and where it goes, that is not for us to comment on, as I said. I mean, this is, you know, a product from, you know, a key collaborator of ours, Zoetis. Again, I would encourage you to look at their website, you know, and take guidance on, from them on how they see this product moving forward.

Um, so as you know, I think the covenants in earlier questions in terms of how long do we see this? This impact lasting, um,

We see this playing out over the next few quarters, uh, you know, it's clearly going to play into Q4 and it will play in. I, I think into the, you know, a couple of Quarters Inn in 27 before it plays out now,

You know, how long and and and where it where it goes. That is not for us to to comment on. As I said, I mean, this is, you know, a product from, you know, a key collaborator of our Zoetis. And again, I would encourage you to look at their website. Uh, you know, and, and, and take guidance on from them, on how they see this product moving forward.

um, in in terms of well, well,

Peter Bains: Um, in, in terms of-

Manoj Bahety: Peter, can I interrupt you? My question was how Syngene is planning to mitigate the impact of this?

Peter Bains: Sure. I'm coming to that, Manoj.

Manoj Bahety: That was-

Peter Bains: I'm coming to that. On the second question, in terms of mitigation, I mean, it's very clear that what Syngene is looking to do is to build, you know, a wide and diversified business across the platforms, you know, and build more large relationships. I mean, I, I think this product was launched. It had very high success at launch. Of course, it's run into the headwinds that it's run into, and that impact has significantly affected our numbers, as you can see, you know, and reflects that, you know, exposure to a single large business. We're working to diversify our business, you know, both across our platforms and in terms of building more large relationships, you know, so that exposure to these types of single product events would be minimized.

My question was, how singing is planning to mitigate the impact of this? Sure. I'm I'm, I'm coming. I'm coming to that. Now, I'm coming to that. So on the second question, in terms of mitigation, I mean, it's very clear that what's singi is, is looking to do is to build, you know, a wide and diversified business across the platforms, you know, and build more large relationships. I mean, I, I, I think

this product was launched, it had very high, uh, success at launch, um, you know, and

Of course, it's run into the headwinds that it's run into. And that impact has significantly affected our numbers as, as you can see. Um, you know, and reflects that, you know, exposure to a single large business, we're working to diversify our business, you know, both across our platforms and in terms of building more large relationships, you know. So that exposure to these types of single product events would be minimized. And, you know, that that is another focus of of how we're looking to build our business going forward.

Peter Bains: You know, that is another focus of how we're looking to build our business going forward.

Okay. Thanks, thanks for taking my question. Thank you.

Pankaj Murarka: Okay. Thanks. Thanks for taking my questions.

Manoj Bahety: Okay. Thanks. Thanks for taking my questions.

We'll take our next question, from the line of pankaj. Muraka from Renaissance investment managers. Please go ahead.

Peter Bains: No problem.

Operator: Thank you. We'll take our next question from the line of Pankaj Murarka from Renaissance Investment Managers. Please go ahead.

Pankaj Murarka: Yeah, hi. Good afternoon, gentlemen. Today you answered some of my questions, but I still want one, to get your take on between now, I presume it's been about six or seven months since you've been back into the saddle. Did some of the existing state of affairs or state at which the business was when you assumed charge, did it surprise you? Point number one. Point number two, while you outlined the initiatives you've taken and you continue to make strategic investments, keeping the long-term interest in the business, and since you're not guiding for next year, and as shareholders, we want to take a slightly more medium-term or longer-term view on the business. Can you qualitatively comment when do you think the business will get back to growth trajectory on the aggregate basis?

Yeah, hi good afternoon gentlemen. Uh uh, today you answered some of my questions, but I still want uh, 1 to get your take on. As we know I presume it's been about 6 or 7 months since you've been back into the SLE

Pankaj Murarka: While I understand that some part of the business is growing and, but still as shareholders, we are not buying parts of business. I'm still not able to understand the pure comment that when you're saying the rest of the business is growing at high single digits, how do you call it a strong growth? I'm still not able to connect that qualitative comment to the underlying growth in the business. I would appreciate, since you're not quantifying or giving guidance, if you could clarify on some of these qualitative comments and comments on some qualitative comments on the questions I'm asking.

So uh, uh did some of the existing state of affairs or state at, which the business was uh, when you assume charge did it surprise you point number 1 Point. Number 2 value outlines initiatives, you take in and you continue to make strategic Investments keeping the long-term interest in the business, uh, and since you're not guiding for next year and a shareholders, we want to take a friendly more medium-term, uh, or a longer term view on the business. Uh, can you uh, call it relatively comment? Uh, when do you think the business will get back to growth trajectory on the aggregate basis? Because while I understand that, some part of the business is growing and uh uh but still a shareholders. We are not buying parts for business and I I still not uh, able to understand the procurement that when you're seeing the rest of the business is growing at high single digit. How do you call it a strong growth? I'm still not able to connect that uh qualitative comment to the underlying growth in the business. So I would appreciate.

Since we are not quantifying or giving guidance. Uh, if you could clarify on some of these qualitative, comments and comments and some quality comments on the questions I'm asking,

Peter Bains: Sure. Thank you. Thank you. Let me address the first part of your question about, you know, how I'm seeing the business having come back into it. You know, I think the first thing to say is, you know, the extent of the single product headwind has been a one-off and was not expected at the time of launch. The launch was successful. This has happened and we obviously have to deal with it. How we're dealing with it is obviously looking to accelerate the growth in the rest of the business, which I've sort of characterized in the near term. Now looking at a, you know, a midterm perspective that you've drawn, I think, you know, prospects are very good.

Sure. Thank you. Thank you. Thank you. Um so let me address the first part of your question about you know how I'm seeing the business having come back into it.

and, you know, I I think the first thing to say is, you know, the extent of the single product, um, has been has been

A 1-off and, and was not expected at the time of launch. The launch was successful. So, this has happened and, and we obviously have to deal with it. And, uh, and, and how we're dealing with it is obviously looking to accelerate the growth and the rest of the business, which I've sort of characterized in the near term.

um, now looking at a at a, you know, a mid-term perspective that you've drawn on, I think, you know, um, prospects are very good, uh, you know, I think

The market is looking as if you know it very clear Market opportunities.

Peter Bains: you know, I think the market is looking as if, you know, very clear market opportunities. We see the trend, you know, in outsourcing of R&D continuing. I mean, it and that provides the sort of basic framework for us as a contract service provider in R&D. We also see the trends in manufacturing outsourcing continuing. Of course, geopolitics is shifting some of the balances there, particularly in the United States and in large molecules. You know, the strategic acquisition of the Bayview site will play into that opportunity. Syngene's capabilities, I think, remain fundamentally very, very strong. I mean, I think our research services, you know, and our capability offerings and our differentiated service propositions in chemistry are very strong and in biology are very strong.

We we see the trend, you know, in Outsourcing of of R&D continuing and it it and and that provides the sort of basic framework for us as a as a contract service provider in R&D. And we also see the trends in manufacturing Outsourcing continuity. Of course.

To your call. 06 is Shifting. Some of the balance, is there particularly in the United States and in large molecules of strategic acquisition of the Bay View site will play into that opportunity?

Um, sings capabilities, I think remain fundamentally very, very strong. I mean, I I, I think our Research Services, uh, you know, and our capability offerings and our differentiated service propositions, and in chemistry of a very strong and in biology of a very strong and now including

Bio Therapeutics where I think we're highly differentiated in, in the Indian context.

Peter Bains: Now including biotherapeutics, where I think we're highly differentiated in the Indian context. In translational and clinical sciences, I think this is a rising tide in India with a very large patient population pool. I think it's a tremendous opportunity for Syngene to strengthen its position in translational sciences and to strengthen its position in clinical trials. We're seeing, you know, the early signs of, you know, very positive traction there. You know, we've got to get over this, you know, the issue that we're dealing with this single product. As I said, I think that will play out in the next few quarters. The underlying business, you know, is sound and the growth rates as Deepak's described, and obviously we want to accelerate those and get them higher. That's what we're looking to build.

And in Translation on the clinical Sciences. I think this is a rising tide in in India with a very large patient population pool, and I think it's tremendous opportunity for singi to strengthen its position in translational sciences and and to strengthen its position in clinical trials. And we're seeing, you know, the early signs of um you know, very positive traction there.

Um, you know, so we've got to get over this, you know, the the issue that we're dealing with with this single product like that, I think that will play out in the next few quarters. The underlying business, you know, is sound and the growth rates as deep as described. And obviously, we want to accelerate those and, and get them higher. And that's what we're looking to build that, you know, and we'll give, you know, guidance on 27. At the end of this fiscal

And and get some range there.

Peter Bains: You know, we'll give, you know, guidance on FY27 at the end of this fiscal and give some range there. I'm optimistic, Pankaj. I mean, I, you know, I think that Syngene is well-placed, needs to get over this, you know, single product issue that's driving us down, and we need to accelerate on, you know, the other elements of what is a very, you know, strong and diverse platform. Syngene is a longstanding company. It's built some of the most remarkable relationships in the industry. We touched on one in this call, you know, the Bristol Myers relationship.

But I'm I'm optimistic, thank you. I mean I you know I think it's engine is well placed needs to get over this. Um, you know, single product issue that's dragging us down and we need to accelerate on, you know, the other elements of what is a very, you know, strong and diverse platform and stingy.

You know, the Bristol mais relationship. Um, and, you know, we will look to be building more, uh, you know, more diverse businesses. And

Peter Bains: You know, we will look to be building more, you know, more diverse businesses and across the board, we'll of course be looking to build bigger and longer term relationships so that our business is more robust, you know, against single point exposures which we're facing today.

Across the board with all, of course, be looking to build bigger, um, and longer term relationships so that our businesses is more robust, you know, against single point explosions, which we're facing today.

Does it answer your question, sure. Thank you. Thank you.

Thank you. Yeah, it does. Thank you. Thank you.

Operator: Pankaj, does that answer your question? Sure. Thank you. Thank you. Thank you. Yeah, it does. Thank you. Thanks a lot. We'll take our last question from the line of Kunal Dandey from Axis Capital. Please go ahead.

Operator: Pankaj, does that answer your question?

Pankaj Murarka: Sure. Thank you. Thank you.

We'll take a last question from the line of Kunal dandera from Access Capital. Please go ahead.

Operator: Thank you.

Pankaj Murarka: Yeah, it does. Thank you. Thanks a lot.

Operator: We'll take our last question from the line of Kunal Dandey from Axis Capital. Please go ahead.

Kunal Dandey: Hi, good afternoon. Thanks for the opportunity. Your customer of this one last product has got approvals for a new molecule, you know, in various geographies in the last few months. Do you expect to partner them in supplying this product because it's for the same indication, for the same, you know, and for the dog injection and so on. Will you be a partner again?

Kunal Randeria: Hi, good afternoon. Thanks for the opportunity. Your customer of this one last product has got approvals for a new molecule, you know, in various geographies in the last few months. Do you expect to partner them in supplying this product because it's for the same indication, for the same, you know, and for the dog injection and so on. Will you be a partner again?

Hi, and good afternoon, thank you for the opportunity. So your customer of this 1. Last product has got approval for a new molecule, uh, you know, in various geographies in the last few months. So do you expect to partner them in supplying this product because it's for the same indication for the same, you know, uh, and not for the dog injection and so on. So will you be a part-time team?

So, you know, we are, you know, we're working with our collaborating partner on that. Um,

Peter Bains: Kunal, we are, you know, we're working with our collaborating partner on that. Let me update you at the full year position. We have a very good channel of dialogue with our collaboration partner and exploring a number of opportunities in real life and then those in the future.

Let me update you with uh at the full year position but we we have a very good channel of dialogue.

With our collaboration Partners, exploring a number of communities and we'll update you as. And when those new

Kunal Dandey: I understand. In case, let's say, these deals do fructify, then do you think this can compensate for the loss of the current product?

Kunal Randeria: I understand. In case, let's say, these deals do fructify, then do you think this can compensate for the loss of the current product?

I understand but in case let's say these deals do Rectify, then do you think this can compensate for the loss of uh, the current product?

Peter Bains: I think that's very hard to say, you know. Directionally, Pankaj, this product, you know, Divac's described the high-level contours of expectation there of this product over 10 years, more than $50 billion per year. Obviously, the early launch success pushed those numbers higher, which has meant that, you know, in addressing the challenges there, obviously the gap that we're faced with is high. That is the single biggest issue that we're dealing. You know, I can't comment or say whether anything else is going to make that all up in one go.

I I think that's very hard to say, uh, you know, and directional package this product, you know, the back, describe the high level Contours of the expectation, there of this product, over 10 years more than a 50 million per year. And obviously, the early Global success, push those numbers higher, which is meant that, you know, in in addressing the challenges there, obviously the Gap that we're faced with is is high and that is the single biggest issue that we're dealing.

um, you know, I can't comment as to say whether anything else is going to make that all up in, in 1 go, but we are very, very focused as I

Peter Bains: We are very, very focused, as I've described, on, you know, doubling down, strengthening and accelerating and encouraging early signs that we're seeing in small molecules, large molecules, and across our discovery services to build that more diverse and broader business mix so that we have a very, very strong position. That's where we are.

Described on, you know, doubling down, strengthening and accelerating in powering early signs that we're seeing in small molecules large molecules and across our Discovery services.

uh, to build that core diverse and

Broader business. Mix. Um, so

That so that we have a very, very strong position. So

that's where we are.

Sure, thank you. And

thank you.

Thank you.

Kunal Dandey: Sure. Sure. Thank you and all the best.

Kunal Randeria: Sure. Sure. Thank you and all the best.

Peter Bains: Thank you, Kunal.

Operator: Thank you. Ladies and gentlemen, as that was the last question for today, you can get in touch with Syngene team for any further questions. On behalf of Syngene International, that concludes this conference. Thank you for joining us. You may now disconnect your lines.

Ladies and gentlemen, as that was the last question for today. You can get in touch with engine team for any further questions on behalf of international. That concludes this conference. Thank you for joining us and you may ask disconnect your lines.

Q3 2026 Syngene International Ltd Earnings Call

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