Q4 2026 Syngene International Ltd Earnings Call

April 30, 2026

Operator: Ladies and gentlemen, good day and welcome to Syngene International's Q4 and FY 2026 financial results conference 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 zero on your touchtone phone. I now hand the conference over to Ms. Nandini Agarwal. Thank you, over to you.

Speaker #2: Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded.

Speaker #2: I now hand the conference over to Ms. Nandini Agarwal. Thank you, and over to you. Good afternoon to everyone. Thank you for joining us on this call to discuss Syngene's fourth quarter and full-year results for financial year 2026.

Nandini Agarwal: Good afternoon to everyone. Thank you for joining us on this call to discuss Syngene's Q4 and full year results for financial year 2026. To discuss the financial and business performance for the period, we have on this call today Ms. Kiran Mazumdar-Shaw, Syngene's Executive Chairperson, Mr. Peter Baines, Managing Director and Chief Executive Officer, and Mr. Deepak Jain, Chief Financial Officer. After the opening remarks, they 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.

Speaker #2: To discuss the financial and business performance for the period, we have on this call today Ms. Kiran Mazumdar-Shaw, Syngene's Executive Chairperson; Mr. Peter Bains, Managing Director and Chief Executive Officer; and Mr. Deepak Jain, Chief Financial Officer.

Speaker #2: After the opening remarks, they 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.

Speaker #2: 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.

Speaker #2: With this, I would now turn the call over to our managing director and CEO, Mr. Bains.

Nandini Agarwal: 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 over to our Managing Director and CEO, Mr. Peter Bains.

Speaker #3: Thank you, Nandini. Good afternoon, everyone, and thank you all for joining us on the call today. Before I begin my remarks, I would like to introduce and welcome Kiran to this call in her new role as the executive chairperson of Syngene.

Peter Baines: Thank you, Nandini. Good afternoon, everyone, and thank you all for joining us on the call today. Before I begin my remarks, I would like to introduce and welcome Kiran to this call in her new role as the Executive Chairperson of Syngene. We are very pleased to have Kiran's leadership and guidance at the executive level as the company transitions into its next phase of growth. Kiran, may I invite you to share your opening remarks?

Speaker #3: We are very pleased to have Kiran's leadership and guidance at the executive level as the company transitions into its next phase of growth. Kiran, may I invite you to share your opening remarks?

Speaker #4: Thank you, Peter. I'm pleased to be back as Executive Chairperson of Syngene International. At such a pivotal point in its journey—one that presents both near-term challenges and significant long-term growth opportunities.

Kiran Mazumdar-Shaw: Thank you, Peter. I'm pleased to be back as Executive Chairperson of Syngene International at such a pivotal point in its journey. One that presents both near-term challenges and significant long-term growth opportunities. FY 2026 closed with a muted top line growth of 3% year-on-year. It is important to note that Q4 delivered a strong 13% sequential growth, which reinforces our confidence that the underlying momentum of the business remains intact. The impact of Librela on our FY 2026 performance has been significant, and it is likely to continue to influence growth in FY 2027 as well. At the same time, FY 2027 will be a transition year for Syngene, with important leadership changes already underway to position, as Peter said, this company for its next phase of growth, particularly in CDMO, biologics, and emerging AI-enabled service lines.

Speaker #4: FY26 closed with a muted top-line growth of 3% year-on-year, however, it is important to note that Q4 delivered a strong 13% sequential growth, which reinforces our confidence that the underlying momentum of the business remains intact.

Speaker #4: The impact of Librella on our FY26 performance has been significant, and it is likely to continue to influence growth in FY27 as well. At the same time, FY27 will be a transition year for Syngene, with important leadership changes already underway to position as Peter said, this company for its next phase of growth.

Speaker #4: Particularly in CDMO, biologics, and emerging AI-enabled service lines, we at Syngene are consciously building new capabilities that move us beyond a traditional services model toward a more value-added, technology-led partnership model.

Kiran Mazumdar-Shaw: We at Syngene are consciously building new capabilities that move us beyond a traditional services model toward a more value-added, technology-led partnership model. Our investments in AI and digital technologies are aimed at improving speed, productivity, predictability, and scale across discovery, development and manufacturing. These capabilities will not only drive operational efficiencies, but will also help us create differentiated offerings for our global customers. Given the current geopolitical uncertainties and the near-term impact of Librela, we expect a broadly flat performance for FY 2027, while maintaining EBITDA margins in the mid-20s through disciplined cost management and sharper operational execution. We also expect to start FY 2027 on a muted note with H2 of FY 2027 to be meaningfully stronger than H1, with growth weighted towards H2 as new contracts ramp up and business momentum improves.

Speaker #4: Our investments in AI and digital technologies are aimed at improving speed, productivity, predictability, and scale across discovery, development, and manufacturing. These capabilities will not only drive operational efficiencies but will also help us create differentiated offerings for our global customers.

Speaker #4: Given the current geopolitical uncertainties and the near-term impact of Librella, we expect a broadly flat performance for FY27 while maintaining EBITDA margins in the mid-20s through disciplined cost management and sharper operational executions.

Speaker #4: We also expect to start FY27 on a muted note with H2 of HY27 to be meaningfully stronger than H1. With growth weighted toward the second half as new contracts ramp up and business momentum improves.

Speaker #4: We believe that FY27 will be a year of strategic reset and execution, with a healthy pipeline of deal flows that will translate into stronger growth from FY28 onwards.

Kiran Mazumdar-Shaw: We believe that FY 2027 will be a year of strategic reset and execution with a healthy pipeline of deal flows that will translate into stronger growth from FY 2028 onwards. Now, with those initial comments, let me hand it back to Peter for a more detailed commentary on the business performance for the year gone by. Over to you, Peter.

Speaker #4: Now, with those initial comments, let me hand it back to Peter for a more detailed commentary on the business performance for the year gone by.

Speaker #4: Over to you, Peter.

Speaker #3: Thank you, Kiran, and good afternoon again, and thank you all for joining us on the call today. Let me start with the fourth quarter, where revenue from operations was $1,037 core, reflecting year-on-year growth of 2% and sequential growth of 13%.

Peter Baines: Thank you, Kiran, and good afternoon again, and thank you all for joining us on the call today. Let me start with the Q4, where revenue from operations was INR 1,037 crore, reflecting year on year growth of 2% and sequential growth of 13%. Operating EBITDA for the quarter stood at INR 303 crore with a margin of 29%, while reported profit after tax before exceptional items was INR 153 crore. Syngene's full year revenue from operations grew 3% and overall performance was in line with our revised guidance. While the overall numbers reflect the continuing impact from a single large molecule biologics client, our underlying business continued to show steady momentum.

Speaker #3: Operating EBITDA for the quarter stood at $303 core, with a margin of 29%, while reported profit after tax before exceptional items was $153 core.

Speaker #3: Syngene's full-year revenue from operations grew 3%, and overall performance within line with our revised guidance. While the overall numbers reflect the continuing impact from a single large molecule biologics client, our underlying business continued to show steady momentum.

Speaker #3: Deepak will provide more details on the financials, but I would like to highlight that Syngene generated a healthy $521 core in free cash during the year, with a closing net cash balance of $1,800 core reflecting the ongoing robustness of our operating model and disciplined execution.

Peter Baines: Deepak will provide more details on the financials, but I would like to highlight that Syngene generated a healthy INR 521 crore in free cash during the year, with a closing net cash balance of INR 1,800 crore, reflecting the ongoing robustness of our operating model and disciplined execution. Globally, pharmaceutical and biotechnology pipelines are increasingly shifting towards novel modalities such as peptides, antibody-drug conjugates, and oligonucleotides. Industry estimates indicate that these advanced modalities now account for over 40% of clinical pipelines and are growing at a materially faster pace than traditional small molecules, reflecting their ability to address complex disease targets. This is driving demand for partners who can offer integrated end-to-end capabilities across these platforms.

Speaker #3: Globally, pharmaceutical and biotechnology pipelines are increasingly shifting towards novel modalities such as peptides, antibody-drug conjugates, and oligonucleotides, industry estimates indicate that these advanced modalities now account for over 40% of clinical pipelines and are growing at a materially faster pace than traditional small molecules, reflecting their ability to address complex disease targets.

Speaker #3: This is driving demand for partners who can offer integrated end-to-end capabilities across these platforms. Anticipating this shift, and building on our existing capabilities in biology and biotherapeutics discovery, we have invested ahead of the curve in strengthening our capabilities in these modalities.

Peter Baines: Anticipating this shift and building on our existing capabilities in biology and biotherapeutics discovery, we have invested ahead of the curve in strengthening our capabilities in these modalities. During the quarter, we commenced operations at our state-of-the-art antibody-drug conjugate discovery laboratory, which is designed to support early stage research. This facility complements and integrates with our existing antibody-drug conjugate development and manufacturing capabilities, enabling a seamless pathway from discovery through to scale-up and production. Turning now to our CDMO business. We are encouraged by the acceleration we are seeing in our pipeline buildup. In our unit three biologics facility in Bengaluru, we have seen increased client interactions from large pharma and emerging biotechnology companies during the quarter. Commercial manufacturing in biologics is inherently a long cycle business, where client engagement typically begins with process research and development, followed by development work, clinical batch production, and ultimately commercial supply.

Speaker #3: During the quarter, we commenced operations at our state-of-the-art antibody-drug conjugate discovery laboratory, which is designed to support early-stage research. This facility complements and integrates with our existing antibody-drug conjugate development and manufacturing capabilities, enabling a seamless pathway from discovery through to scale-up and production.

Speaker #3: Turning now to our CDMO business, we are encouraged by the acceleration we are seeing in our pipeline build-up. In our unit three biologics facility in Bengaluru, we have seen increased client interactions from large pharma and emerging biotechnology companies during the quarter.

Speaker #3: Commercial manufacturing in biologics is inherently along cycle business, where client engagement typically begins with process research and development, followed by development work, clinical batch production, and ultimately commercial supply.

Speaker #3: Within this framework, we are seeing encouraging interest in our integrated capabilities supporting a healthy pipeline across different stages of the value chain. At our Bayview Biologics facility in the United States, preparations are progressing well, and we are actively engaging with prospective customers as we move toward operationalization of the site this year.

Peter Baines: Within this framework, we are seeing encouraging interest in our integrated capabilities, supporting a healthy pipeline across different stages of the value chain. At our Bayview Biologics facility in the United States, preparations are progressing well and we are actively engaging with prospective customers as we move toward operationalization of the site this year. Stepping back to reflect on the full year, I will emphasize again the key structural balance we are addressing between the headwind related to Librela and the steady growth of the underlying business. Over the course of the year, we have taken several important steps to strengthen our mid and long-term positioning. A key highlight was the extension of our long-standing partnership with Bristol Myers Squibb, now extending through to 2035.

Speaker #3: Stepping back to reflect on the full year, I will emphasize again the key structural balance we are addressing between the headwind related to Librella and the steady growth of the underlying business.

Speaker #3: Over the course of the year, we have taken several important steps to strengthen our mid and long-term positioning. A key highlight was the extension of our long-standing partnership with Bristol-Myers Squibb, now extending through to 2035.

Speaker #3: This expanded agreement broadens the scope of our collaboration across the drug development lifecycle, spanning discovery, translational sciences, pharmaceutical development, manufacturing, and clinical research. It reflects the depth and confidence built up over many years in this collaboration.

Peter Baines: This expanded agreement broadens the scope of our collaboration across the drug development life cycle, spanning discovery, translational sciences, pharmaceutical development, manufacturing, and clinical research, and reflects the depth and confidence built up over many years in this collaboration. We have also continued to invest in enhancing our manufacturing capabilities. In our small molecule platform, we commissioned a new commercial scale facility for liquid-filled hard gelatin capsules, strengthening our oral solid dosage capability and enabling us to support increasingly complex formulations with much greater precision and reliability. In our large molecule biologics platform, as I have touched on earlier, we've expanded our Bengaluru facility with the addition of a GMP bioconjugation suite, enabling fully integrated end-to-end manufacturing of antibody drug conjugates.

Speaker #3: We have also continued to invest in enhancing our manufacturing capabilities. In our small molecule platform, we commissioned a new commercial-scale facility for liquid-filled hard gelatin capsules, strengthening our oral solid dosage capability and enabling us to support increasingly complex formulations with much greater precision and reliability.

Speaker #3: In our large molecule biologics platform, and as I have touched on earlier, we've expanded our Bengaluru facility with the addition of a GMP bioconjugation suite enabling fully integrated end-to-end manufacturing of antibody-drug conjugates.

Speaker #3: This capability brings monoclonal antibody production and GMP bioconjugation into a single site, helping accelerate development timelines while complementing our existing strengths in payload and linker manufacturing.

Peter Baines: This capability brings monoclonal antibody production and GMP bioconjugation into a single site, helping accelerate development timelines while complementing our existing strengths in payload and linker manufacturing. Turning to our commitments towards Syngene's ESG and sustainability framework. This continues to be an important area of focus for Syngene, and I'm very pleased to advise that we are included in the S&P Global Sustainability Yearbook 2026, placing us amongst a select group of leading companies globally and amongst the top 10 in the life sciences sector. We were also recognized by Time Magazine and Statista as one of the world's most sustainable companies, ranking number 1 in India's pharma and biotechnology sector and amongst the top 20 globally. In summary, our diversified and integrated business model across research services and contract manufacturing continues to provide resilience, balance, and opportunity.

Speaker #3: Turning to our commitments towards Syngene's ESG and sustainability framework, this continues to be an important area of focus for Syngene, and I'm very pleased to advise that we are included in the S&P Global Sustainability Yearbook 2026, placing us amongst the select group of leading companies globally and amongst the top 10 in the life sciences sector.

Speaker #3: We are also recognized by Time Magazine and Statista as one of the world's most sustainable companies, ranking number one in India's pharma and biotechnology sector and among the top 20 globally.

Speaker #3: In summary, our diversified and integrated business model across research services and contract manufacturing continues to provide resilience, balance, and opportunity. Supported by strong client relationships and investments in emerging modalities and expanding global capabilities, we believe we are well positioned to meet evolving customer requirements and capture opportunities across the value chain going forward.

Peter Baines: Supported by strong client relationships, investments in emerging modalities, and expanding global capabilities, we believe we are well-positioned to meet evolving customer requirements and capture opportunities across the value chain going forward. Looking ahead to the next year, and as Kiran has outlined, while we are guiding towards a broadly flat performance for the full year, we do expect Q1 to have a more pronounced adverse impact of Librela destocking. Thank you. I will now hand over to Deepak to go through the financials in a little bit more detail.

Speaker #3: Looking ahead to the next year, and as Kiran has outlined, while we are guiding towards a broadly flat performance for the full year, we do expect Q1 to have a more pronounced adverse impact of Librella destocking.

Speaker #3: Thank you, and I will now hand over to Deepak to go through the financials in a little bit more detail.

Speaker #5: Thank you, Peter. A very good afternoon to everyone. Let me begin by discussing the fourth quarter's performance, and then I will cover the full year results.

Deepak Jain: Thank you, Peter. A very good afternoon to everyone. Let me begin by discussing the Q4's performance, and then I will cover the full year results. First, looking at revenue. Revenue from operations for the Q4 was INR 1,037 crores, a 2% increase year-on-year in reported terms. Revenue growth was impacted by the ongoing destocking issue related to Librela, as spoken earlier as well. Turning to costs, raw material costs were at 22% of revenue in this quarter, compared to 23% in the same quarter of the previous year, driven by business mix changes. Staff costs increased by about 19% year-on-year. Other direct costs, primarily comprising of power utility expenses, increased 17% year-on-year due to new facilities at Bayview in the US and the biologics facility in Bangalore.

Speaker #5: First, looking at revenue. Revenue from operations for the fourth quarter was $1037 crores, a 2% increase year-on-year in reported terms. Revenue growth, however, was impacted by the ongoing destocking issue related to Librella, as spoken earlier as well.

Speaker #5: Turning to costs, raw material costs were at 22% of revenue in this quarter, compared to 23% in the same quarter of the previous year.

Speaker #5: Driven by mixed business mix changes. Staff costs increased by about 19% year-on-year. Other direct costs, primarily comprising power and utility expenses, increased 17% year-on-year due to new facilities at Bayview in the US and the biologics facility in Bangalore.

Speaker #5: Other expenses decreased by 9% year-on-year due to our cost optimization initiatives. The company saw a hedge loss of about 21 crores against a hedge loss of 4.6 crores in the same quarter of the previous year, due to the difference between average and spot hedge rates.

Deepak Jain: Other expenses decreased by 9% year-on-year due to our cost optimization initiatives. The company saw a hedge loss of about INR 21 crores against a hedge loss of INR 4.6 crores in the same quarter of the previous year due to the difference between average and spot hedge rates. The movement in revenue and costs resulted in operating EBITDA of INR 303 crores with a margin of 29% for the quarter versus 34% in the same quarter last year. Depreciation increased by 5% year-on-year in line with our plans and due to the addition of capacities at the biologics manufacturing sites in Bangalore, which came operational this year. Interest expense declined by 24% as borrowing reduced in Q4 2026 compared to the same quarter last year.

Speaker #5: The movement in revenue and costs resulted in operating EBITDA of $303 crores with a margin of 29% for the quarter, versus 34% in the same quarter last year.

Speaker #5: Depreciation increased by 5% year-on-year in line with our plans and due to the addition of capacities at the biologics manufacturing sites in Bangalore, which came operational this year.

Speaker #5: Interest expense declined by 24% as borrowing reduced in Q4 '26 compared to the same quarter last year. Other income increased by 18% compared to Q4 last year, primarily due to higher cash and equivalent balances.

Deepak Jain: Other income increased by 18% compared to Q4 last year, primarily due to higher cash and equivalent balances. Overall profit after tax but before exceptional items stood at INR 153 crores, down 16% year-on-year. As you know, the Government of India has recently notified the four labor code consolidation, consolidating the 29 existing labor laws. During the quarter, we reassessed the impact of the new labor codes, which resulted in a gratuity remeasurement credit of INR 20 crores net of tax. Moreover, expenses of about INR 25 crores net of tax were recognized under exceptional items related to termination benefits extended to employees in accordance with an approved proposal. Adjusted for these exceptional items, reported profit after tax was INR 148 crores, down 19% year-on-year.

Speaker #5: Overall profit after tax but before exceptional items stood at $153 crore, down 16% year-on-year. As you know, the Government of India has recently notified the four labor codes, consolidating the 29 existing labor laws.

Speaker #5: During the quarter, we reassessed the impact of the new labor codes, which resulted in a gratuity remeasurement credit of ₹20 crores net of tax.

Speaker #5: Moreover, expenses of about $25 crores net of tax were recognized under exceptional items related to terminal termination benefits extended to employees in accordance with an approved policy.

Speaker #5: Adjusted for these exception items, reported profit after tax was ₹148 crore, down 19% year-on-year. The normalized effective tax rate for the quarter was 24.2% as compared to 23.7% in the same quarter last year, due to a change in profit mix across the units.

Deepak Jain: The normalized effective tax rate for Q4 was 24.2%, as compared to 23.7% in the same Q4 last year due to change in profit mix across the units. Moving to CapEx. We continue to invest in building capabilities and technologies that enable us to become an integrated solution provider for our clients. During Q4, we invested $10 million, around 50% in research services, primarily across capability builds and contractual obligations and dedicated centers, along with regular maintenance CapEx. Nearly 40% of the CapEx was in CDMO business. The remaining CapEx was towards digitization, automation, and common infrastructure. We continue to maintain a strong balance sheet. After meeting our CapEx spends for Q4, we have a net cash balance of INR 1,800 crores as of 31 March 2026. Turning to the full-year performance.

Speaker #5: Now, moving to CapEx, we continue to invest in building capabilities and technologies that enable us to become an integrated solution provider for our clients.

Speaker #5: During the fourth quarter, we invested $10 million around 50% in research services, primarily across capability builds and contractual obligations and dedicated centers, along with regular maintenance CapEx.

Speaker #5: Nearly 40% of the CapEx was in the CDMO business. The remaining CapEx was towards digitization, automation, and common infrastructure. We continue to maintain a strong balance sheet after meeting our CapEx spends for the quarter; we have a net cash balance of $1,800 crore as of 31st March 2026.

Speaker #5: Turning to the full-year performance, reported revenue from operations increased by 3% year-on-year. Raw material cost was at 25% of revenue in FY26, compared to 26% last year, driven by business mix changes.

Deepak Jain: Reported revenue from operations increased by 3% year-on-year. Raw material cost was at 25% of revenue in FY 2026 compared to 26% last year, driven by business mix changes. Staff costs increased by 14%. Our direct costs, primarily comprising of power and utilities, increased by 6% and other operating costs increased by 6%. Operating EBITDA margin stood at 25% for FY 2026, and profit after tax before exceptional items was INR 380 crores, down 20% year-on-year. As we look ahead, we will continue to invest in technology platforms and enhancements, digitization, and automation, and strengthen our presence in new modalities like peptides, ADCs to build on our strengths. With that, I suggest we open up for questions.

Speaker #5: Staff costs increased by 14%. Our direct costs, primarily comprising power and utilities, increased by 6%, and other operating costs increased by 6%. Operating EBITDA margin stood at 25% for FY26, and profit after tax before exceptional items was $380 crore, down 20% year-on-year.

Speaker #5: As we look ahead, we will continue to invest in technology platforms and enhancements, digitization, and automation, and strengthen our presence in new modalities like peptides and ADCs, to build on our strengths.

Speaker #5: With that, I suggest we open up for questions.

Speaker #1: 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 the touch-tone telephone.

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 touch-tone 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 our first question from the line of Kunal Dhamesha from Macquarie. Please go ahead.

Speaker #1: 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.

Speaker #1: 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 Damesha from Macquarie.

Speaker #1: Please go ahead.

Speaker #3: Hi. Thank you for the opportunity, and congratulations on a good set of numbers. The first question is on the impact from Librella. If you could quantify—let's say, if we remove Librella both from FY25 and FY26—then how would FY26 growth and profitability look like?

Kunal Dhamesha: Hi, thank you for the opportunity and congratulations on a good set of numbers. The first question is on the impact from Librela. If you could, you know, quantify, let's say if we remove Librela both from FY 2025 and FY 2026, then how would our FY 2026 growth and profitability look like?

Speaker #4: So, Kunal, let me take that. If we remove Librella from both the years, we have growth as we've always called out. Underlying growth is in single digits, though.

Deepak Jain: Kunal, let me take that. If we remove Librela from both the years, we have growth as we've always called out. Underlying growth is in single digits, though, and the impact of Librela is a culmination of what you see in the numbers.

Speaker #4: And the impact of Librella is a culmination of what you see in the numbers.

Speaker #3: So, with Librella also, we have grown 3%, right?

Speaker #4: Yes.

Speaker #3: With Librella impact, right? And the single-digit would be mid-single-digit or high-single-digit?

Kunal Dhamesha: With Librela also we have grown 3%, right. Let it Librela impact, right. The single digit will be mid single digit or high single digit.

Speaker #4: It'll be a little high single-digit space, yes. We don't break that down right now.

Speaker #3: Okay. And in terms of profitability, would it have improved between FY25 and FY26 without Librella?

Deepak Jain: It'll be a little higher single digit space, yes. We don't break that down right now.

Kunal Dhamesha: Okay. In terms of profitability, would it have improved between FY25 and 26, without Librela?

Speaker #4: I mean, the overall profitability has declined, and the impact of Librella is a factor in that as well. Plus, the business mix changes—that's one.

Deepak Jain: I mean, the overall profitability has declined, and the impact of Librela is a factor into that as well, plus the business mix changes. That's one. Secondly, our facilities have come online as well, right? The Bangalore facility has come online. That has impacted the profitability as well this year.

Speaker #4: Secondly, our facilities have come online as well. The Bangalore facility has come online, and that has impacted the profitability as well this year.

Speaker #3: Okay. And let’s say, from the FY27 guidance perspective of flat revenue, what is being built for Librella supplies? Are we expecting it to move to zero in that guidance, or are we expecting a gradual decline?

Kunal Dhamesha: Okay. Let's say from the FY 2027 guidance perspective of flat revenue, what is being built for Librela supplies? Are we expecting it to move to zero in that guidance or we expecting a gradual decline?

Speaker #4: We expect, as Peter alluded to a little bit, that the coming quarters—Q1 and Q2—will have almost no Librella. There are some minor Librella volumes towards the end of the year, but that's about it.

Deepak Jain: We expect, as Peter alluded a little bit, that the coming quarters, Q1 and Q2, will have almost no Librela. There is some minor Librela volumes towards the end of the year, but that's about it. Most of the Librela impact will be done in this first two quarters. Librela, as of now, we have no incremental revenue plans for Librela beyond one small amount in the last quarter.

Speaker #4: Most of the Librella impact will be done in these first two quarters. And Librella, as of now, we have no incremental revenue plans for Librella beyond one small amount in the last quarter.

Speaker #3: Sure. And in terms of the current quarter, is the cost related to the Bayview facility fully baked in? Because last time we had suggested that the hiring is ongoing.

Kunal Dhamesha: Sure. In terms of the current quarter, is it cost related to Bayview facility fully baked in? Because we last time we had suggested that the hiring is ongoing. Is it fully baked in Q4 or there is more cost which can come? If you could also highlight the total drag from both these facility unit 3 and Bayview on the current P&L, you know, on a quarterly basis, that would be helpful.

Speaker #3: So is it fully baked in Q4, or there is more cost which can come? And if you could also highlight the total drag from both these facility unit three and Bayview on the current P&L on a quarterly basis.

Speaker #3: That would be helpful.

Speaker #4: So, Kunal, we are on the Unit Three. We've capitalized it as we said in the beginning of the first quarter of FY26, and the impact, therefore, is of the people, etc.

Deepak Jain: Kunal, we are on the unit 3, we've capitalized it as we said at the beginning of Q1 of FY 2026. The impact of, therefore, is, of the people, et cetera, and all the costs are definitely coming into the P&L. The impact of Bayview is only partially coming into the P&L to the extent that's not capitalized. We have not yet fully capitalized the facility, we will come and update you about Bayview's capitalization and the plans forward.

Speaker #4: And all the costs are definitely coming into the P&L. The impact of Bayview is only partially coming into the P&L, to the extent that's not capitalized.

Speaker #4: We have not yet fully capitalized the facility, so we will come and update you about Bayview's capitalization and the plans going forward.

Speaker #3: But it would be baked into that mid-20s EBITDA margin guidance, right? For FY27?

Speaker #4: Yes. Yes. Yes.

Kunal Dhamesha: It would be baked into the mid-20s EBITDA margin guidance, right, for FY 2027?

Speaker #3: Sure. Sure. Sure. I have more questions. I'll join the questions. All the best.

Deepak Jain: Yes. Yes. Yes.

Speaker #4: Thank you.

Speaker #1: Thank you. Next question is from the line of Surya Patra from Philip Capital India. Please go ahead.

Kunal Dhamesha: Sure. Sure. Sure. I have more question. I will join back with you. All the best.

Deepak Jain: Thank you.

Operator: Thank you. Next question is from the line of Surya Patra from PhillipCapital India. Please go ahead.

Speaker #5: Thanks for the opportunity, and congrats for the positive surprise—numbers that you delivered in the fourth quarter. Sir, I just wanted to understand, compared to the guidance we had given in the third quarter, where we had been saying there would be kind of underperformance both in terms of revenue as well as on the margin front.

Surya Patra: Thanks for the opportunity. Congrats for the positive surprise number what you have delivered in Q4. Sir, I just wanted to understand, compared to the guidance what we had given in Q3, where we have been saying that there would be kind of underperformance both in terms of revenue as well as on the margin front. This quarter turns to be a kind of a strongly positive quarter to that guidance. What really caused this positive surprise in terms of operating performance?

Speaker #5: But this quarter turns out to be a kind of strongly positive quarter compared to that guidance. What really caused this positive surprise in terms of operating performance?

Speaker #4: So, yeah, we did guide towards a fuller number. Obviously, that had an implication on what the quarter looks like. We were able to churn out improved revenue for the quarter.

Deepak Jain: No, Surya, we did guide towards the full year numbers. Obviously, that had an implication of what the quarter looks like. We were able to churn out improved revenue for the quarter by only a marginal amount, right? Not a major change. In terms of profit, because our full year numbers have come more or less in line with what we had said in terms of our currency forecast or guidance that we'd given. If you look at margins for sure, you know, we continue to be more efficient and be more frugal on our costs. That's what's led to an improved margin versus what we wanted it to be, what we guided it to be.

Speaker #4: But by only a marginal amount, right? Not a major change. In terms of profit, because our fuller numbers have come more or less in line with what we had said in terms of our constant currency.

Speaker #4: Forecast or guidance that we’d given. If you look at margins, for sure, we continue to be more efficient and be more frugal on our costs.

Speaker #4: That's what's led to an improved margin versus what we wanted it to be, what we guided it to be. And therefore, margins have shown an improvement, and we'll continue to hold the margins as we've guided.

Speaker #5: Okay, okay. That is helpful, sir. I just wanted to also understand whether any revenue booking from the clinical trial activities or services—whether that is visible in this quarter?

Deepak Jain: Therefore, margins have shown an improvement and will continue to hold the margins as we've guided.

Surya Patra: Okay. Okay. That is helpful, sir. I just wanted to also understand whether any revenue booking from the clinical trial activities or services, whether that is visible in this quarter. If not, any outlook that we are separately giving for the clinical trials activities that we have added as a new vertical for FY 2027.

Speaker #5: If not, is there any outlook that we are separately giving for the clinical trial activities that we have added as a new article for FY27?

Speaker #4: I mean, clinical trials, Surya, if you remember, we said we were always being present in clinical trials, right? What we guided in Q2 was a win that we had on a global trial.

Deepak Jain: Clinical trials, Surya, if you remember, we said we have always been present in clinical trials, right? What we guided in Q2 was a win that we had on a global trial. Right now, the global trial was gonna pan out a few years, as what we have said as well. Therefore, what you do see in this year's this quarter and coming years as well, that there will be clinical trial revenue that will bake into the numbers. It's an ongoing business. We definitely focusing more on that business, but the revenue continues to flow this quarter and in the coming years.

Speaker #4: Right now, the global trial was going to pan out a few years as what we had said as well. And therefore, what you do see in this year's this quarter and coming years as well that there will be clinical trial revenue that will bake into the numbers it's an ongoing business.

Speaker #4: We definitely focusing more on that business. But the revenue continues to float this quarter and in the coming year.

Speaker #5: Okay. Sir, in regards to since it is the fourth quarter and closer of the year, so can you share what is the split between revenue split between the CDMO and CRO?

Surya Patra: Okay. Sir, regards, since it is the Q4 and closure of the year, can you share what is the split between revenue split between the CDMO and CRO? If you can also give some color that the way that you're looking these two businesses for next year, while the slack is for quantity or guided. Since the, since you have mentioned also the environment in the CDMO space is improving, what outlook that you should be baking in for CRO as well as CDMO separately?

Speaker #5: And if you can, also give some color that the way that you are looking these two businesses for next year. The strategy is for quantity or guidance.

Speaker #5: But since you have mentioned also the environment in the CDMO space is improving, so what outlook that you should be baking in for CRO as well as CDMO separately?

Speaker #4: Yeah. So, in terms of this year, we had about, as I said, typically two-thirds, one-third—two-thirds towards the CRO business, one-third towards the CDMO business.

Deepak Jain: Yeah. In terms of this year, we had about, as I said, typically two-third, one-third. Two-third towards the CRO business, one-third towards the CDMO business. That mix as what we had seen until Q3 continues to be the mix that we're seeing in Q4 as well. Broadly, two-third, one-third. We are anticipating that to be directionally in line for even the next year. You would continue the split to be almost similar. There will be minor changes as we continue to evolve through the year. Broadly, two-third, one-third is what you can take for your modeling purposes for the moment. We will keep updating as we evolve through the year.

Speaker #4: That mix as what we had seen until quarter three continues to be the mix that we're seeing in quarter four as well. So broadly, two-thirds, one-third.

Speaker #4: We are anticipating that to be directly in line for even the next year. So you would continue the split to be almost similar. There will be minor changes as we continue to evolve through the year.

Speaker #4: But broadly, two-thirds, one-third is what you can take for your modeling purposes for the moment. We will keep updating as we evolve through the year.

Speaker #5: I would like to add to what Deepak just said. In the Q4, there was a slide that said that 41% came from CDMO and 59% came from the research services business.

Kunal Randeria: I would like to add to what Deepak just said. In the Q4.

Kiran Mazumdar-Shaw: I would like to add to what Deepak just said. In the Q4.

Deepak Jain: Mm-hmm.

Kunal Randeria: There was a slide that said that 41% came from CDMO and 59% came from, the research services business, so that's an indication.

Kiran Mazumdar-Shaw: There was a slide that said that 41% came from CDMO and 59% came from, the research services business, so that's an indication.

Speaker #5: So that's an indication.

Speaker #4: Okay. Oh, that is really helpful. Just one more thing. See, the capabilities that we have been building either in terms of the peptide, ADC, or hard gelatin capsules, along with the capacities also that we are we have acquired or built up.

Surya Patra: Okay. Oh, that is really helpful. Just one more thing. Let's see, the capabilities that we have been building, either in terms of the peptide ADC or hard gelatin capsules, along with the capacities also that we are, we have acquired or built up. Is there any gestation period that we should consider, ma'am, about or, like, is there any gestation period then only we will see, start seeing kind of a revenue or earning implication out of those?

Speaker #4: So is there any gestation period that we should consider or so is there any gestation period then only we will see start seeing kind of a revenue or earning implication out of those?

Speaker #5: So Surya, I'll start and probably I'll draw Peter's views as well on this. Typically, when we have these capacities that we build up on the CDMO space specifically, right?

Deepak Jain: Surya, I'll start.

Surya Patra: Yeah.

Deepak Jain: I'll draw in Peter's views as well on this.

Speaker #5: And you saw that written Unit 3 as well. Before we take the site, we’ve got to get it into qualification stages. We’ve got to do some trial batches, runs.

Surya Patra: Okay.

Deepak Jain: Typically, when we have these capacities that we build up on the CDMO space specifically, right? You saw that a bit in unit three as well. You know, before we take the site, we gotta get it into qualification stages. We gotta do some trial batches runs, we get into regulatory approval structures, right? Typically, they do take, you know, 12, 18, 24 months, depending upon the nature of the site, the state of readiness at the site itself when we bought it as well. You would expect, you know, you did see what happened in unit three. It took us almost 18 odd months to get it operational and capitalize the site.

Speaker #5: And then we get into regulatory approval structures, right? Typically, they do take 12, 18, 24 months, depending upon the nature of the site and the state of readiness of the site itself when we bought it as well.

Speaker #5: So, you would expect—you did see what happened in unit three. It took us almost 18-odd months to get it operational and capitalize the site.

Speaker #5: You would expect the initial trial runs, etc., on Bayview to also go through and then in the coming year, we should start seeing some engineering batches, etc., come through and capitalizations once we get the regulatory approvals, which we can't really comment on the timeline right now.

Deepak Jain: You would expect the initial trial runs, et cetera, on Bayview to also go through, and then, you know, in the coming year, we should start seeing some engineering batches, et cetera, come through and capitalizations once we get the regulatory approvals, which we can't really comment on the timeline right now.

Speaker #5: Surya, let me add to Deepak's comments. And speak a little bit about the capability enhancements in the areas like hard gel capsules and antibody-drug conjugates and peptides.

Peter Baines: Surya, let me add to Deepak's comments, and speak a little bit about, you know, the capability enhancements in the areas like hard gel capsules and antibody drug conjugates and peptides. You know, where we are building new capabilities and we're building capabilities that strengthen existing capabilities. We would expect here to look to, for this to contribute towards the pipeline build that Kiran referred to in her opening remarks and contribute toward, you know, the exit in 2027 on a growth trajectory, and then looking to 2028 to see more sustained growth as we clear the Librela impact at the end of 2027.

Speaker #5: Where we are building new capabilities and we're building capabilities that strengthen existing capabilities. And we would expect here to look to for this to contribute towards the pipeline build that Kiran referred to in her opening remarks and contribute towards the exit in '27 on a growth trajectory and then looking to '28 to see more sustained growth as we clear the umbrella impact at the end of '27.

Speaker #5: Sure. Sure. Yeah. Thank you. Thank you for this comment. Wish you all the best for future quarters.

Surya Patra: Sure. Sure. Yeah. Thank you. Thank you for these comments. Wish you all the best for future quarters.

Speaker #4: Thank you.

Speaker #2: Thank you. Next question is from the line of Kunal Danderia from Access Capital. Please go ahead.

Peter Baines: Mm-hmm.

Speaker #4: Good afternoon, sir. Sir, the question is on a section 232 tariffs where around 100% levy will be on patented pharma products and the ingredients.

Operator: Thank you. Next question is from the line of Kunal Randeria from Axis Capital. Please go ahead.

Kunal Randeria: Hi. Good afternoon, sir. The question is on Section 232 tariffs, where around 100% levy will be on patented pharma products and the ingredients. Don't you think this can slow down future order contracts for CDMO players?

Speaker #4: So, don't you think this can slow down future order contracts for CDMO players?

Speaker #5: Kunal, our assessment of the tariff impact on Syngene is it will be negligible, both as a service industry and in the product supplies that we make and supply to our customers.

Peter Baines: Kunal, our assessment of the tariff impact on Syngene is it will be negligible. You know, as both a service industry and in the product supplies that we make and supply to our customers, we are not anticipating any material effect of tariffs on Syngene’s business.

Speaker #5: So we are not anticipating any material effect of tariffs on Syngene's business.

Speaker #4: Great, sir. So you're saying even after this announcement, you are still getting RFPs from your prospective customers?

Kunal Randeria: Great, sir. You're saying even after this announcement, you are still getting RFPs from your prospective customers?

Speaker #5: Yes, we are.

Speaker #4: Great, great. Okay. The second question is on your contract with Crystal Myers that was extended till 2035. It seems to be a bit more expansive, a bit more extensive than last time.

Peter Baines: Yes, we are.

Kunal Randeria: Great. Great. Okay. The second question is on your contract with Bristol-Myers that was extended till 2035. It seems to be a bit more expansive or a bit more extensive than last time. Is the wallet size bigger?

Speaker #4: So is the wallet size bigger?

Speaker #5: So I mean, again, this is a very important component of our business. It's our largest collaborator and a unique construct. 28 years now, in terms of legacy and looking forward now for 10-year future horizon.

Peter Baines: I mean, I, again, this is a very important component of our, of our business. It's our largest collaborator and a unique construct, 28 years now, in terms of legacy and looking forward now a 10-year future horizon. I think it's really the time horizon enables strategic thinking and, of course, if we look at the market outside and developments in these new modalities that we've discussed and of course the implications and evolution of AI into discovery and development, it really allows the parties, Bristol Myers Squibb and Syngene, to think strategically, and that includes some of the expansions that we discussed in opening remarks and areas that we will look to collaborate.

Speaker #5: I think it's really the time horizon enables strategic thinking and, of course, if we look at outside, and developments in these new modalities, that we've discussed, and of course, the implications and evolution of AI into discovery and development, it really allows the parties, Bristol Myers, Squibb, and Syngene to think strategically.

Speaker #5: And that includes some of the expansions that we discussed in opening remarks, in areas that we will look to collaborate. But it really provides that strategic framework so that we can plan in the mid- and longer-term to support Bristol Myers Squibb as they evolve their pipelines and portfolios.

Peter Baines: It really provides that strategic framework so that we can plan in the mid and the longer term to support Bristol Myers Squibb, you know, as they evolve their pipelines and portfolios. That, that is really the real strength of the extension of the collaboration, is providing that now decade horizon going forward so that Syngene, you know, can really look to support Bristol's strategic outlook as it builds its pipeline and its portfolio going forward.

Speaker #5: So that is really the real strength of the extension of the collaboration is providing that now decade horizon going forward so that Syngene can really look to support Bristol's strategic outlook as it builds its pipeline and its portfolio going forward.

Speaker #4: Right. So that obviously should translate into higher revenues than what you have received from Bristol in the past. If you're, I mean, putting in so many adjacent—

Kunal Randeria: Right. That obviously should translate into higher revenues than what you have received from Bristol in the past. If you're, I mean, I'm putting so many ideas into-

Speaker #5: So, Kunal, I mean, yeah, I mean, I don't think we can comment in any short-term horizon there. Obviously, if we look at the history of this relationship over the course of years...

Peter Baines: I mean, we're not, yeah, I mean, I don't think we can comment in any short-term horizon there. Obviously, if we look at the history of this relationship over the course of years, it has grown, this is already a substantial business in scale and, you know, growth, it will not be linear in that sense. I think it will grow around US inflation at some level, you know. Its expansion going forward will be determined by the nature of, you know, the strategic outlook and the new areas of expansion and opportunity.

Speaker #5: It has grown, but this is already a substantial business in scale. And growth will not be linear in that sense. I think it will grow around US inflation at some level.

Speaker #5: But it's expansion going forward will be determined by the nature of these the strategic outlook and the new areas of expansion and opportunity.

Speaker #4: Right. Right. Thank you. And all the best.

Speaker #2: Thank you. Next question is from the line of Avnish Berman from Vaikaria Change LLP. Please go ahead.

Kunal Randeria: Right. Right. Thank you, and all the best.

Operator: Thank you. Next question is from the line of Avinash Maman from Vicaria Changell LLP. Please go ahead.

Speaker #4: Hi. Good afternoon. Thanks for taking my question. I had a question around the cost increases that you might be witnessing because of the Middle East conflict.

Avinash Maman: Hi. Good afternoon. Thanks for taking my question. I had a question around the cost increases that you might be witnessing because of the Middle East conflict. Could be raw material, could be utility pricing. I just wanted some qualitative color on how your contracts are structured, both on the CRO side and on the CDMO side. How easy is it to pass on these cost increases to the customers or how difficult it is, as the case may be? Thanks.

[Analyst] (Vicasa Capital): Hi. Good afternoon. Thanks for taking my question. I had a question around the cost increases that you might be witnessing because of the Middle East conflict. Could be raw material, could be utility pricing. I just wanted some qualitative color on how your contracts are structured, both on the CRO side and on the CDMO side. How easy is it to pass on these cost increases to the customers or how difficult it is, as the case may be? Thanks.

Speaker #4: Could be raw material, could be a utility pricing. I just wanted some qualitative color on how your contracts are structured, both on the CRO side and on the TDMO side, how easy is it to pass on these cost increases to the customers, or how difficult it is as the case may be?

Speaker #4: Thanks.

Speaker #5: So sort of typically, these are different contracts with different clients. The nature of the contracts depends on the need of what we are trying to service.

Deepak Jain: Sort of typically these are different contracts with different clients. The nature of the contracts depends on the need of what we are trying to service and also depends on the nature of the molecule in conversation or the support that is required, right? It's not one size fits all. It also depends upon the conversation of the long-term horizon of the contract that we get into. It's not a straightforward answer of saying are all contracts which have elements of cost that we pass through or not. I think it depends upon the nature of the conversation and the services that we are providing. I don't think there's a straight answer to your question, sort of.

Speaker #5: And also, it depends on the nature of the nature of the molecule in conversation or the support that this requires, right? So it's not one-size-fits-all.

Speaker #5: It also depends upon the conversation of the long-term horizon of the contract that we get into. So it's not a straightforward answer of saying are all contracts which have elements of cost that we pass through or not.

Speaker #5: I think it depends upon the nature of the conversation and the services that we are providing. I don't think there's a straight answer to your question.

Speaker #4: Okay. Again, I mean, if you just bifurcate your business into CRO and CDMO, is your answer true for both these businesses, or is there one business where it's relatively easy to have those kind of conversations with the client?

Avinash Maman: Okay. Again, I mean, if you just bifurcate your business into CRO and CDMO, is your answer true for both these businesses or is there one business where it's relatively easy to have those kind of conversations with the client?

[Analyst] (Vicasa Capital): Okay. Again, I mean, if you just bifurcate your business into CRO and CDMO, is your answer true for both these businesses or is there one business where it's relatively easy to have those kind of conversations with the client?

Speaker #5: Let me maybe also add in here. I mean, the implications of what's happened are evident, as everyone can see. I'll start by saying that there have been no disruptions to the continuity of service and supplies on Syngene's ongoing business.

Peter Baines: Let me maybe also add in here. I mean, the implications of what's happened, you know, are evident as everyone can see. I'll start by saying that there have been no disruptions to the continuity of service and supplies on Syngene's ongoing business. That has been, you know, navigated by the team very successfully and obviously in conjunction with our partners. Of course, there have been some cost increases that we've seen in some areas and some of them, you know, as you well know, that there's been little bits of spikes in some of the prices. There are two things here. We don't know how long this will go on and to what extent it may continue.

Speaker #5: That has been navigated by the team very, very successfully, and obviously, in conjunction with our partners. Of course, there have been some cost increases that we've seen in some areas, and some of them—as you will know—there's been a little bit of spikes in some of the prices.

Speaker #5: There are two things here. We don't know how long this will go on and to what extent it may continue. We are obviously re-engineering distribution and logistics, and we're obviously looking at costs, and we're, of course, talking to our customers and collaborators. But as Deepak said, I think there is not a one-size-fits-all answer to this, and it will be customer by customer and contract by contract. They are also looking at how we re-engineer the logistics and the supply chains, and they are, of course, also aware of some of the cost implications there.

Peter Baines: We are obviously re-engineering distribution and logistics, we're obviously looking at costs, and we're of course talking to our customers and collaborators. As Deepak said, you know, I think there is not a one-size-fits-all answer to this, and it will be customer by customer and contract by contract, and they are also looking at, you know, how we re-engineer the logistics and the supply chains, and they are of course also aware of some of the cost implications there. I don't think there's any material impact that we're considering at this point in time. You know, we'll have to wait and see how this resolves going forward.

Speaker #5: But I don't think there's any material impact that we're considering at this point in time. But we'll have to wait and see how this resolves going forward.

Speaker #4: Okay. Thanks, Sergey.

Speaker #2: Thank you. Next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead.

Avinash Maman: Okay. Thanks. I'll get back in touch.

[Analyst] (Vicasa Capital): Okay. Thanks. I'll get back in touch.

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

Speaker #6: Yeah, good afternoon. Thank you for taking my question. Just between January and now, you're reporting in April, we had cut our EBITDA measures and guidance for the full year to 22–23 percent.

Shyam Srinivasan: Yeah, good afternoon. Thank you for taking my question. Just between January and now you're reporting in April, you know, we had cut our EBITDA margin guidance for the full year to 20% to 23%, and we delivered 25%, right? Now when we look at our guidance for next year it seems to suggest flat margins. I'm just a little confused with respect to the EBITDA margin guidance. I think on revenue we have probably met full year guidance for fiscal 2025, 2026. Just the push and pulls, because we just cut guidance and then now we actually beat our guidance. Is there something that was supposed to happen that got postponed into, say, fiscal 2027 that has led to this cost change? Was there a mix issue? If you could explain just what happened in 2 months.

Speaker #6: And we delivered 25, right? And now when we look at our guidance for next year, it seems to suggest flat margins. So I'm just a little confused with respect to the EBITDA margin guidance.

Speaker #6: I think on revenue, we have probably met full-year guidance for fiscal 26. But just the push and pulls because we just cut guidance and then now we actually beat our guidance.

Speaker #6: So, is there something that was supposed to happen that got postponed into, say, fiscal '27 that has led to this cost change, or was there a mix issue?

Speaker #6: If you could explain just what happened in two months.

Speaker #5: There are two parts to it, Shyam. One for sure, the product mix is a big factor of what made the big swing. Into our margin structures, right?

Deepak Jain: There are two parts to it, Shyam. One, for sure, you know, the product mix is a big factor of what made the big swing, you know, into our margin structures, right? There was an assumption of what our product mix would be and the cost structures related to that product mix in terms of raw materials, the people that will get engaged and so on and so forth. That went through a bit of a shift, and that was a positive shift in that direction. Obviously, there's some bit of also cost that's gone into the exceptional items as well that's also led to that change. Two major contributors right now.

Speaker #5: There was an assumption of what our product mix would be and the cost structures related to that product mix in terms of raw materials for people that will get engaged and so on and so forth.

Speaker #5: That went through a bit of a shift and that was a positive shift in that direction. Obviously, there's some bit of also cost that's gone into the exceptional items as well.

Speaker #5: That's also led to that change. So, two major contributors right now. One is the product mix change, or the services that we had anticipated—or the revenue mix that we had anticipated—went through a change, and then some bit of the cost went into exception items as well.

Deepak Jain: One is the product mix change or the services that we had anticipated or the revenue mix that we had anticipated went through a change and then some bit of the cost went into exception items as well.

Speaker #6: Got it. So Deepak, just from a forward-looking perspective, right, is it getting difficult for you to estimate corporate margins? Has something changed? Do we still have the aspiration to go towards the high 20s?

Shyam Srinivasan: Got it. Deepak, just from a forward-looking perspective, right, is it getting difficult for you to estimate corporate margins? Has something changed? You know, do we still have the aspiration to go towards the high twenties, maybe 30% margins? Do you think that overall. You know, I'm not asking for a specific year, but is there a path to going back? You think we are now moved to a slightly lower trajectory of what margins can be?

Speaker #6: Maybe 30% margins? Do you think that overall—I'm not asking for a specific year—but is there a path to going back, or do you think we are now moved to a slightly lower trajectory of what margins can be?

Speaker #5: So Shyam, two things. One, for sure, we've guided you towards a mid-20s even for the next year as Kiran mentioned. That's definitely taking into consideration how we expect the utilization curve on our sites that we have bought with recent costs.

Deepak Jain: Shyam, two things. One, for sure, we've guided you towards the mid-twenties even for the next year, as Kiran mentioned. That's definitely taking into consideration, you know, how we expect the utilization curve on our sites that we have bought in recent past that's gonna come up. More importantly, we've always mentioned, and we've said this in the past as well, as the utilization curves on the sites improve, we do expect the margin profile to improve as well. Aspirationally, for sure, we definitely want to improve the margins, as of now, we're guiding only for the year and we're guiding it towards the mid-twenties as called out earlier.

Speaker #5: That's going to come up. But more importantly, we've always mentioned—and utilization curves on the sites improve—we do expect the margin profile to improve as well.

Speaker #5: Aspirationally, for sure, we definitely want to improve the margins. But as of now, we're guiding only for the year, and we're guiding it towards the mid-20s, as called out earlier.

Speaker #6: Got it. And my last question, just going back now on revenue. So when we look at fiscal 24, revenue was 418 million. Fiscal 25 was 413.

Shyam Srinivasan: Got it. My last question, just going back now on revenue. When we look at fiscal 2024 revenue was INR 418 million, fiscal 2025 was INR 430, now we are INR 419 in 2026 and we are guiding for a flat, so INR 419, right? Just making that number up, last one. I'm just saying, when does it get higher, right? Is there, you know, what needs to kind of get us back on a growth path on revenue? I know we have done a lot of investments ahead of time, but, you know, what could be the major triggers for a revenue growth to also restart? Thank you.

Speaker #6: Now we are 419 in 26 and we are guiding for a flat. So 419. Right? Just making that number up last one. But I'm just saying when does it get higher, right?

Speaker #6: Is there what needs to kind of get us back on a growth path on revenue? I know we have done a lot of investments ahead of time.

Speaker #6: But what could be the major triggers for a revenue growth through also restart? Thank you.

Speaker #5: Shyam, let me respond first and then Deepak can come in. Getting back to more sustainable growth and to higher growth levels is clearly the direction that we're looking to build Syngene.

Peter Baines: Shyam Srinivasan, let me respond first and then Deepak Jain can come in. You know, getting back to more sustainable growth and to higher growth levels is clearly the direction that we're looking to build Syngene. The Librela headwinds have clearly had material impacts last year, 2026, and as we've outlined, will continue to have effects through 2027, and those are now absorbed in the guidance frameworks that Kiran Mazumdar-Shaw outlined. We would expect to end 2027, you know, on a growth trajectory, and the Librela effect will then have washed out. In a way, 2027 represents a sort of resetting of the baseline.

Speaker #5: The Librella headwinds have clearly had material impacts last year, '26, and as we've outlined, will continue to have effects through '27, and those are now absorbed in the guidance frameworks that Kiran outlined.

Speaker #5: And we would expect to end ’27 on a growth trajectory, and the Librella effect will then have washed out. In a way, ’27 represents a sort of resetting of the baseline, and then, with the investments that we've made in the modalities and the capabilities that we're building, and with the maturation of the pipelines that we're developing on the commercial side, we would expect to see those begin to play through.

Peter Baines: With the investments that we've made in the modalities and the, and the capabilities that we're building, you know, and with the maturation of the pipelines that we're developing, you know, on the commercial side, we would expect to see those begin to play through and, you know, look beyond 2027 for a more sustainable and higher growth trajectory.

Speaker #5: And look beyond '27 for a more sustainable and higher growth trajectory.

Speaker #6: Great. Thank you. All the best.

Speaker #2: Shyam?

Speaker #4: Maybe I should add to what Peter and Deepak have just said. We are really focusing also on our CDMO business, which we think will give us more aggressive and sustainable growth.

Shyam Srinivasan: Great. Thank you. All the best.

Operator: Sham?

Kiran Mazumdar-Shaw: Maybe I should add to what Peter and Deepak have just said. We are really focusing also on our CDMO business, which we think will give us more, you know, aggressive and sustainable growth.

Speaker #2: Thank you. We'll take the next question from the line of Harit Ahmed from Avendas Park. Please go ahead.

Operator: Thank you. We'll take the next question from the line of Harith Ahamed from Avendus Spark. Please go ahead.

Speaker #3: Hi. Good afternoon. Thanks for the opportunity. So my first question is on the partnership with Zoetis. Zoetis has a follow-on molecule to Librella. It's called Linuvia and I was just wondering if Syngene has any role in the supply chain for that product.

Harith Ahamed: Hi. Good afternoon. Thanks for the opportunity. My first question is on the partnership with Zoetis. Zoetis has a follow-on molecule to Librela, it's called Lenivia. I was just wondering if Syngene has any role in the supply chain for that product, given Zoetis already has a European approval and they're expecting a US approval shortly.

Speaker #3: Given Zoetis already has a European approval, and they're expecting a US approval shortly.

Speaker #5: So, let me take that. And at this point, we do not have any participation in the follow-on molecule going forward. I mean, just to add on to that, we did do some bit of clinical work for them.

Peter Baines: Let me take that. And at this point, we do not have any participation in the follow-on molecule going forward.

Speaker #5: On the other molecule, but in terms of ongoing commercial production, we're in conversation, but nothing beyond that right now.

Deepak Jain: Just to add on to that is we did do some bit of clinical work for them, on the, on the other molecule. In terms of ongoing commercial production, we are in conversation, but nothing beyond that right now.

Speaker #3: Understood. So my second question is on the research services side of the business. So firstly, if you could give some color on the mix within research services today, so you've talked about it in one of your slides about discovery services, translation services, and clinical trials.

Harith Ahamed: Understood. My second question is on the research services side of the business. Firstly, if you could give some color on the mix within research services today. You talked about in one of your slides, about discovery services, translation services, and clinical trials. Just trying to understand the mix as well as, you know, some of the macro headwinds that you've called out in terms of biotech funding, how we should think about the impact of these challenges on each of these verticals.

Speaker #3: And just trying to understand the mix as well as some of the macro headwinds that you've called out in terms of biotech funding how we should think about the impact of these challenges on each of these verticals.

Speaker #5: Harith, we don't call out quantitatively the split, but of course, chemistry, which is the legacy foundation of Syngene, is the biggest part of the business.

Peter Baines: Harith, we don't call out, you know, quantitatively the split. Of course, chemistry, which is the legacy foundation of Syngene, is the biggest part of the business. Biology and now biotherapeutics, where, you know, we believe Syngene is very well-placed in India as a lead player, you know, supports that. As we've said, you know, our translation and clinical services are at a lower starting point. We are seeing some encouraging opportunities here for growth. It is, I think, the balance, the large balance is chemistry and supported biology and biotherapeutics with translation and clinical research, you know, a smaller part. You know, going forward, we would expect all three legs of that stool and discovery services, you know, to look to growth.

Speaker #5: Biology and now biotherapeutics where we believe Syngene is very well placed in India as a lead player. Supports that. And as we've said, our translation and clinical services are at a lower starting point, but we are seeing some encouraging opportunities here for growth.

Speaker #5: So it is, I think, the balance, the large balance is chemistry and supported biology and biotherapeutics with translation and clinical research a smaller part.

Speaker #5: But going forward, we would expect all three legs of that stool and discovery services to look to growth. And where I think we can see growth in all three cylinders, or all three legs of that stool, I think in biotherapeutics, there's very clear opportunity of differentiated capability, differentiated services, playing into a high growth part of the contract research market.

Peter Baines: You know, where I think we can see growth in all three cylinders or all three legs of that stool. You know, I think in biotherapeutics there's a, you know, very clear opportunity of differentiated capability, differentiated services playing into a high growth part of the contract research market. Of course, as we've discussed in previous calls, the translation and clinical research business is, you know, looking at significant expansion, you know, going forward over the coming years as clinical trials pick up in India and as the translational capability plays into discovery capabilities more broadly.

Speaker #5: And of course, as we've discussed in previous calls, the translation and clinical research business is looking at significant expansion going forward over the coming years, as clinical trials pick up in India and as the translational capability plays into discovery capabilities more broadly.

Speaker #5: Thanks, Peter. I hope—one last question. Yeah. Yeah, I'll get back with you. Thanks.

Harith Ahamed: Thanks, Peter.

Speaker #2: Thank you. Next question is from the line of Alankar Garude from Kotak Institutional Equities. Please go ahead.

Peter Baines: Okay.

Harith Ahamed: I have one last question. Yeah. Yeah. I'll get back with you. Thanks.

Operator: Thank you. Next question is from the line of Alankar Garude from Kotak Institutional Equities. Please go ahead.

Speaker #5: Hi. Good afternoon, everyone. Peter, in your discussions with clients, how are they assessing the impact of AI on drug discovery? And how are you gearing up for any shifts in the business model, as well as activity levels?

Alankar Garude: Hi. Good afternoon, everyone. Peter, in your discussions with clients, how are they assessing the impact of AI on drug discovery, and how are you gearing up for any shifts in the business model as well as activity levels?

Speaker #3: Sure, Alanka, obviously a very important question. I mean, I think it is very clear to everybody that the implications of AI in discovery, in development, and in manufacturing will be profound.

Peter Baines: Sure, Alankar. Obviously a very important question. I mean, I think it is very clear to everybody that the implications of AI in discovery, in development and in manufacturing, you know, will be profound. You know, I'm not sure what the timeline is and how it will land, but already, you know, we are seeing rapid changes in the evolution, and I think Kiran touched on this in her opening remarks, the application of AI to improve timelines, which are obviously critical, of critical importance to all our clients and collaborators. You know, to improving predictability through modeling. You know, to reduce risk through enhanced predictability and fundamentally to enhance innovation, you know, with AI applications that can look to find new targets, you know, and to look to enhance validation of these targets.

Speaker #3: I'm not sure what the timeline is and how it will land, but already we are seeing rapid changes in the evolution. And I think Kiran touched on this in her opening remarks—the application of AI to improve timelines, which are obviously of critical importance to all our clients and collaborators.

Speaker #3: To improve predictability through modeling to reduce risk through enhanced predictability, and fundamentally to enhance innovation. With AI applications that can look to find new targets and to look to enhance validation of these targets.

Speaker #3: In development, and in clinical development, we're already seeing applications of AI that will help all aspects of the clinical side—in patient recruitment, in data management, and so forth.

Peter Baines: You know, in development and in clinical development, we're already seeing applications of AI that will help, you know, all the aspects of the clinical side, in patient recruitment, in data management and so forth, in translational sciences. You know, as these elements enhance the predictability of drug discovery, we'll see applications of AI in there. Of course, in manufacturing, we're already working with digital twins to enable us to enhance our ability to manage and optimize manufacturing. Alankar, I think it is clear that there will be profound implications of AI. From Syngene's side, again, we've been investing in, you know, new capabilities there.

Speaker #3: In translational sciences, as these elements enhance the predictability of drug discovery, we'll see applications of AI in there. And of course, in manufacturing, we're already working with digital twins to enable us to enhance our ability to manage and optimize manufacturing.

Speaker #3: So, Alanka, I think it is clear that there will be profound implications of AI. And from Syngene's side, again, we've been investing in new capabilities there.

Speaker #3: We have a team of AI scientists who are looking at the application of algorithms and so forth to enhance our service offerings, and to create value for our customers.

Peter Baines: We have a team, you know, of AI scientists who are looking at the application of algorithms and so forth to enhance our service offerings and to create value to our customers. Of course, with our customer base, we're working in this, in this arena with many companies. I think the shorter answer is it is going to change, and profoundly discovery, development and manufacturing, and that Syngene is moving and accelerating its capabilities to enhance differentiated service value creation to our customers in that field. Kiran, you may want to add something in on this.

Speaker #3: And of course, with our customer base, we're working in this arena with many companies. So I think the shorter answer is it is going to change.

Speaker #3: And profoundly, discovery, development, and manufacturing, and that Syngene is moving and accelerating its capabilities to enhance differentiated service value creation to our customers in that field.

Speaker #3: Kiran, you may want to add something in on this.

Speaker #4: No, I think what you said is adequate because I think these are important times and points of inflection. But I think what you have said is fairly well covered.

Kiran Mazumdar-Shaw: No, I think, what you said is adequate because I think these are, you know, important times and points of inflection, but I think what you have said is fairly well covered.

Speaker #3: That's very helpful, Peter. Kiran, I have the second question for you. You have now come into an executive role at Syngene after a long time.

Alankar Garude: Got it. That's very helpful, Peter. Kiran Ma'am, the second question for you. You have now come into an executive role at Syngene after a long time. There is also a new team led by Siddharth Mittal coming in from Biocon Generics. Can you take us through what prompted these decisions? Did you at any point in time evaluate an external candidate?

Speaker #3: There is also a new team led by Siddharth and Abhijit, coming in from Biocon Generics. Can you take us through what prompted these decisions? And did you at any point in time evaluate an external candidate?

Speaker #4: So, first and foremost, I think this plan has been in place for some time. In fact, Peter has also been part of taking this decision because I think it was very clear that after Jonathan departed, Peter played a very important role—to play the role of interim CEO till Siddharth could join.

Kiran Mazumdar-Shaw: First and foremost, I think, this plan has been in place for some time. In fact, Peter has also been part of taking this decision because I think it was very clear that after Jonathan departed, you know, Peter played a very important role to play the role of an interim CEO till Siddharth could join. As you know, we did believe that there was a strong rationale that we needed a full-time, you know, the full-time presence of a CEO in India because I think it's very important to getting into CDMO. Operational excellence was very important, where the CEO has to have a very close, you know, oversight on these kind of businesses.

Speaker #4: And as you know, we did believe that we needed a very—there was a strong rationale that we needed the full-time presence of a CEO in India.

Speaker #4: Because I think it's very important to getting into CDMO, operational excellence was very important, where the CEO has to have a very close oversight on these kinds of businesses.

Speaker #4: And because Siddharth is someone who has played a very important role at Biocon, who understands the CDMO business—because Biocon is very much involved in that kind of manufacturing operations.

Kiran Mazumdar-Shaw: Because Siddharth is someone who has played a very important role at Biocon, who understands the CDMO business because Biocon is very much involved in that kind of manufacturing operations. It, you know, it was something that we felt was the right thing to do. Abhijit, of course, also comes with a very strong experience of commercial and business development capabilities, where he has actually built a number of partnerships, a number of collaborations. As you know, both Abhijit and Siddharth have played a very important role in building various partnerships, whether it is the Viatris partnership, whether it was the, you know, the Pfizer partnership, whether it was the Cuban partnership, and many others. You know, I think we are very comfort.

Speaker #4: It was something that we felt was the right thing to do. Abhijit, of course, also comes with a very strong experience of commercial and business development capabilities where he has actually built a number of partnerships, a number of collaborations and as you know, both Abhijit and Siddharth have played a very important role in building various partnerships, whether it is the Viatris partnership, whether it was the Pfizer partnership, whether it was the Cuban partnership.

Speaker #4: And many others. So I think we are very, very they are both very, very experienced and comfortable with building partnerships and collaborations. And we believe that this is really a services business is about building these partnerships and relationships.

Kiran Mazumdar-Shaw: They are both very, very experienced and comfortable with building partnerships and collaborations. We believe that this is really a services business is about building these partnerships and relationships. We didn't have a very formal commercial structure which we felt would actually help the business going forward. I'm, you know, someone who has worked with them very closely for over many, many years. Obviously, I'm happy to be back to, you know, take Syngene through this very exciting time. This is a team I'm very familiar with, and I'm very confident that we will rebuild and re-reset and rebuild the Syngene model in all the particular areas that we spoke about. You know, Peter has done an excellent job of being that interim CEO.

Speaker #4: And we didn't have a very formal commercial structure, which we felt would actually help the business going forward. So, I'm someone who has worked with them very closely for many, many years.

Speaker #4: Obviously, I'm happy to be back to take Syngene through this very exciting time. And this is a team I'm very familiar with, and I'm very confident that we will reset and rebuild the Syngene model in all the particular areas that we spoke about.

Speaker #4: And Peter has done an excellent job of being that interim CEO, and I think we now believe that Syngene is in very good hands.

Speaker #3: Sure. That's very helpful, Kiran ma'am. And with your permission, one final question. Deepak, you spoke about the cost efficiency measures helping margins. There is also a termination charge.

Kiran Mazumdar-Shaw: I think, we now believe that Syngene is in very good hands.

Alankar Garude: Sure. That's very helpful, Kiran Ma'am. With your permission, one final question. Deepak, you spoke about the cost efficiency measures helping margins. There is also a termination charge. Can you just take us through some of these cost rationalization initiatives and where are we in this journey?

Speaker #3: Can you just take us through some of these cost rationalization initiatives? And where are we in this journey?

Speaker #5: So as called out in the notes as well, Alanka, this is termination benefits of rebalancing the organization, right? If you see the people cost, you will see the cost going up.

Deepak Jain: As called out in the notes as well, Alankar, this is termination benefits of rebalancing the organization, right? If you see the people cost, you will see the cost going up, but that was the investments that we made in the people at the beginning of the year. There was some rebalancing in some parts of the organization that we needed to do. It is, it is, impact that we've taken into the financials as termination benefits, and that's what you see as the cost implication, right? I really won't comment beyond that right now in terms of how it's gonna play out in the future, but the margin structure is what we've commented upon, and we're gonna probably hold on to the margin guidance that we've given.

Speaker #5: But that was the investments that we made in the people at the beginning of the year. And then there was some rebalancing in some parts of the organizations that we needed to do.

Speaker #5: So it is an impact that we've taken into the financials. There's termination benefits. And that's what you see as the cost implication, right? I really won't comment beyond that right now in terms of how it's going to play out in the future.

Speaker #5: But the margin structures, what we've commented upon and we're going to probably hold on to the margin guidance that we've given.

Speaker #3: Fair enough. That's it from my side. Thank you.

Speaker #5: Thank you.

Speaker #6: Thank you. Ladies and gentlemen, that was the last question for today. You can get in touch with the Syngene team for any further questions. On behalf of Syngene International, that concludes this conference.

Alankar Garude: Fair enough. That's it from my side. Thank you.

Deepak Jain: Thanks.

Operator: Thank you. Ladies and gentlemen, 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, and you may now disconnect your lines.

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