Recommendation from Healthcare Sector

This section gives a recommendation of a stock having stock price below Rs 150 with sound fundamentals and expected to give handsome returns over a one-year time horizon[EasyDNNnews:PaidContentStart]

Syncom Formulations India Ltd. : SCALING BEYOND GENERICS

HERE IS WHY
✓  Moving Into Injectables and Critical Care
✓  Expanding Beyond Pharmaceuticals
✓  Export Growth and Improving Margins

I ndia’s pharmaceutical manufacturing sector continues to benefit from rising healthcare demand, increasing access to affordable medicines and India’s position as a global generic pharmaceutical manufacturing hub. Syncom Formulations (India) Ltd (Syncom) is an established manufacturer of generic medicines, with a manufacturing capacity of 200 formulations across nine dosage forms, including tablets, capsules, injectables, ointments and liquids, and has a presence in more than 25 countries.

Syncom’s business is primarily driven by pharmaceutical drugs and formulations, complemented by commodity trading and property rentals. Its vertically integrated manufacturing model enables in-house production across multiple dosage forms, supporting product development, quality control and international supply contracts. The company is also expanding into critical care, nutraceuticals and wellness products, leveraging its existing manufacturing infrastructure and distribution network to diversify revenue streams and strengthen its market presence.

The expansion of injectable and critical care manufacturing is a key growth catalyst. Syncom is investing in dedicatedmanufacturing facilities for its Injectables and Critical Care Division, with portfolio expansion identified by management as a strategic priority. Its manufacturing modernisation programme has added dry-injection, liquid-ampoule and liquidvial lines, increasing annual injectable capacity from 200 lakh to 300 lakh units. The expansion provides opportunities to enter higher-value pharmaceutical segments, cater to institutional demand and broaden its presence in regulated export markets.

The company is also broadening its presence in nutraceuticals and wellness products. Its direct-to-consumer platform, Cratuscart, is operational, while the board has proposed expanding its business activities to include dietary supplements, herbal preparations and wellness products, subject to shareholder approval. Additionally, the acquisition of two floors in Mumbai’s Trade Star building provides opportunities to diversify. International expansion remains an important growth driver, supported by new product registrations and entry into additional geographies.

Financial performance improved materially during FY26, supported by higher pharmaceutical segment profitability. Consolidated total income increased to ₹520.51 crore from ₹482.45 crore in FY25, while EBITDA rose to ₹108.77 crore from ₹71.57 crore. PAT increased to ₹76.44 crore from ₹49.43 crore, with EBITDA margin improving to approximately 20.9 per cent from 14.8 per cent. The momentum continued into Q1 FY27, with consolidated total income growing 8 per cent to ₹133.36 crore, while PBT increased 59 per cent to ₹32.25 crore and PAT rose approximately 58 per cent to ₹24.85 crore.

Principal risks include raw material price volatility, regulatory pricing pressures and execution challenges associated with expansion. Dependence on imported APIs and pharmaceutical inputs exposes the company to supply chain disruptions and cost fluctuations.

The stock trades at a P/E of 24.8x, compared with the industry P/E of 35.2x and its three-year median P/E of 40.2x, with a Dividend yield of 0.42 per cent. Syncom’s growth outlook is supported by its established manufacturing base, improving profitability, injectable capacity expansion, international product registrations and diversification into nutraceuticals and Real Estate.

Sustaining margin improvement, utilising additional capacity and managing working capital will remain key monitorables.

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