Syngene margin recovers QoQ, but remains below last year's level
Revenue momentum improved sequentially, but operating margin at 17.70% trailed the healthcare peer median of 20.96%.
Filed 27 Oct 2026, 19:35 IST · after market close · Syngene International Ltd (SYNGENE)
Key takeaways
- Consolidated operating margin recovered 5.36 percentage points QoQ to 17.70%, as revenue grew +13.14% while expenses rose +6.22%.
- Year-on-year, revenue fell -8.55% while expenses declined only -3.63%, pushing operating margin down 4.21 percentage points and net profit down -52.01%.
- Other income contributed 45.32% of pre-tax profit, while the tax rate rose 10.25 percentage points YoY to 31.49%.
Price around the results
Sequential rebound, but YoY earnings remain weaker
Syngene's consolidated revenue grew +13.14% QoQ, but remained down -8.55% YoY. The sequential improvement lifted operating profit by +62.33%, while net profit recovered from a loss in Q1FY27; however, net profit was still down -52.01% YoY. The year-on-year decline reflects weaker revenue conversion despite lower absolute expenses.
Lower cost growth supported the margin recovery
QoQ revenue growth of +13.14% outpaced expense growth of +6.22%, expanding operating margin by 5.36 percentage points. The opposite pattern held YoY: expenses fell only -3.63% against an -8.55% revenue decline, narrowing margin by 4.21 percentage points. Profit quality was mixed, as other income made up 45.32% of pre-tax profit and the YoY tax rate increased by 10.25 percentage points, although the QoQ tax rate fell by 21.63 percentage points.
Margin is recovering from Q1, but still trails peers
Operating margin improved from 12.34% in Q1FY27 to 17.70% in Q2FY27, after moving between 21.91% and 29.27% in the preceding four quarters. The current margin was 3.26 percentage points below the 20.96% median for 18 healthcare peers that had reported. Syngene ranked fifth from the bottom on this measure.
Expansion and process automation remain management priorities
The company said it had expanded laboratory capacity in Bangalore and Hyderabad and entered Mangalore for commercial API manufacturing. The presentation said Syngene is automating workflows to reduce errors and improve execution quality. Management also said it is pursuing dual sourcing and domestic supplier development for critical raw materials.
No immediate market reaction after the filing
The results were filed after market close, so there is no reported market reaction yet. Across eight recent result announcements, the stock rose three times and fell five times, with a median absolute move of 6.01%, indicating that post-results moves have usually been sizeable and more often negative.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹833 cr | ₹736 cr | +13.14% | -8.55% |
| Other income | ₹21 cr | ₹12 cr | +80.51% | +38.31% |
| Expenses | ₹685 cr | ₹645 cr | +6.22% | -3.63% |
| Operating profit | ₹147 cr | ₹91 cr | +62.33% | -26.12% |
| Operating margin (%) | 17.70% | 12.34% | — | — |
| Interest | ₹10 cr | ₹10 cr | +4.17% | -24.24% |
| Depreciation | ₹112 cr | ₹112 cr | -0.45% | -4.12% |
| Profit before tax | ₹47 cr | ₹-19 cr | — | -44.84% |
| Tax | ₹15 cr | ₹-10 cr | — | -18.23% |
| Net profit | ₹32 cr | ₹-9 cr | — | -52.01% |
| EPS (₹) | ₹0.80 | ₹-0.22 | — | -52.10% |
Operating margin of 17.70% compares with a Healthcare sector median of 20.96% across 18 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Expansion
- Syngene expanded laboratory capacity in Bangalore and Hyderabad.
- Syngene expanded into Mangalore for commercial API manufacturing.
New initiatives
- Syngene is automating workflows to eliminate errors and improve execution quality.
- Syngene is developing domestic suppliers for critical raw materials and using a dual-sourcing strategy.
Competition
- Syngene describes itself as one of the largest integrated CRDMO players in India.
- Syngene counts 16 of the top 20 pharmaceutical companies among its clients.
What to watch
- Whether operating margin moves above the current 17.70% after its 5.36-percentage-point QoQ recovery.
- Whether revenue growth remains ahead of expense growth after +13.14% revenue growth versus +6.22% expense growth QoQ.
- Whether other income's 45.32% contribution to pre-tax profit declines in the next quarter.