Syngene International’s research subsidiary of pharmaceutical giant Biocon’s shares, rose 6% on October 19 after a strong earnings performance in the September quarter. The stock closed at Rs 589.25 on the NSE, its highest close since September 2, up 6.3%.

Syngene International reported a 53% year-on-year increase in consolidated profit to Rs 102 crore in the quarter that ended September 30, 2022, supported by strong revenue and operating income. Profits were also supported by a low base in the same period last year as the government’s decision to cap the Research Services Export Incentive Scheme (SEIS) of Rs 5 crore in FY20 development services resulted in an unusual loss of Rs 250 crore in the second quarter of FY22. Before special items, profit rose 11% year-on-year. Consolidated revenue rose 26% to Rs 768.1 crore, with all segments performing well.

The company said in its BSE filing that discovery services experienced continued demand and development services that benefited from repeat orders from existing customers, particularly in drug development and clinical supply. In manufacturing services, the company said it completed a batch of commercial-scale process performance qualifications as part of a long-term biologics manufacturing agreement with animal health company Zoetis in the first quarter. It added that commercial production of the veterinary drug Librela API could begin in the fourth quarter of fiscal 2023, subject to completing the required audits.

On an operational level, EBITDA (earnings before interest, tax, depreciation and amortization) rose 22% to Rs 216.5 crore, but margins fell 90 basis points to 28.2% compared to the same period last year.

For the half year ended FY23, Syngene’s profit rose 22% year-on-year to Rs 176 crore on revenue of Rs 1,413 crore, up 17% from a year earlier. EBITDA rose 14% to Rs 420 crore in 1HFY23 compared to last year’s period.