I feel it is a bit negative. Independence is good and that is why the company does the demergers.
I can be wrong as it is a first time I am observing something like this.
Is it usual to have a group ceo for 2 demerged entity?
Any take on it?
There are looking for synergies and trying to use the unutilised capacity.
Syngene do have some unutilised capacity in Mangalore and Bangalore(Strides).
I don’t track Biocon(excluding Syngene) but know that their business is of biosimilars(biologics generics) and they can’t setup considerable new capacity for some time due to huge debt if they don’t have much now.
Neither they can sell more of Syngene to reduce debt as they will lose majority stakes in Syngene.
It is not a succession planning as confirmed by Kiran Shaw in the video.
Also it was said that the individual CEO will have the autonomy but some kind of contradicting statement was made later at 6:57.
Removing Syngene and intangibles, Biocon has the assest turnover ratio more than 1. I don’t have much knowledge about the optimal assest turnover of the biosimilars and generics but considering Syngene guide for 1X asset turnover, I guess Biocon(excluding Syngene) is utilised enough.
Strides(Bangalore) though purchased now has some kind of approvals still it was written that it will contribute meaningfully for Syngene bottom line from FY27. I can be totally wrong but they are looking at the Syngene Strides plant for their biosimilar production or even the mangalore plant for the generics production. It is little early and immature statement to make for now.
One of the thing that can make my point invalid is that if Biocon(excluding Syngene) has unutilised capacity for small molecule as well large molecule.
Disclosure : I can be terribly wrong. I am comparatively new to the market. Syngene is my high allocation bet.
