Home / Syncom Formulations Creates All Time High 229 Jump In 9 Mths
Syncom Formulations Creates All-Time High: 229% Jump in 9+ Mths!
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Table of Contents
- 1: Chart: Syncom Formulations All Time High & 52 Week Low as of 27 Dec 2023
- 2: Syncom Formulations’s Record Surge to a New All-Time High
- 2.1: Factors Contributing to a Stock’s All-Time High
- 2.2: Positive Earnings Reports
- 2.3: Favorable Industry Trends
- 2.4: Analyst Ratings
- 3: Potential Scenarios Following an All-Time High
- 4: Syncom Formulations Stock Analysis: Potential Supports and Targets
- 4.1: KEY PERFORMANCE METRICS
- 4.1.1: Syncom Formulations Fibonacci Retracement Or Support levels
- 4.1.2: Syncom Formulations Fibonacci Extensions Or Target levels
- 5: Making Informed Investment Decisions
- 5.1: Company’s Financial Health
- 5.2: Industry Outlook
- 5.3: Market Sentiment
Chart: Syncom Formulations All Time High & 52 Week Low as of 27 Dec 2023
Syncom Formulations hit its 52 week low of ₹4.60 on 29 Mar 2023 and from there it move to ₹16.90 creating a brand-new All Time High on 27 Dec 2023, giving a whopping 229.35% return in just 8 months and 28 days.
If you had invested ₹10,000 at its 52-week low price, your investment would have grown to ₹32,935 by 27 Dec 2023. This represents a gain of ₹22,935 in just 8 months and 28 days. Given SYNCOMF's strong recent performance, Lets find out what opportunities lies ahead for SYNCOMF
If you had invested ₹10,000 at its 52-week low price, your investment would have grown to ₹32,935 by 27 Dec 2023. This represents a gain of ₹22,935 in just 8 months and 28 days. Given SYNCOMF's strong recent performance, Lets find out what opportunities lies ahead for SYNCOMF
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Syncom Formulations’s Record Surge to a New All-Time High
The all-time high of Syncom Formulations can be a result of many factors. Its previous all-time high, before correction, was made on 24 November 2023 at ₹ 11.7. It took 1 month and 03 days to create a new all-time high at ₹ 16.9 on 27 December 2023. In between, it made a low of ₹ 10.5 on 28 November 2023, implying a correction of over 10%. It may represent a change in the investors’ sentiment about the company due to improved financial condition or may represent overvaluation. Let’s go through the factors contributing to its all-time high.
Factors Contributing to a Stock’s All-Time High
Positive Earnings Reports
- In the last 2 quarters, Syncom Formulations has given double-digit growth in revenue year-on-year. In Q2 FY24, its revenue increased by 17.15% YOY to ₹ 63.83 crores.
- In the last 3 quarters, its revenue has increased by over 70% YOY. In Q2 FY24, its operating income increased 3.11% even though the cost of goods sold saw a more significant increase compared to the rise in revenue. It happened due to a reduction in operating expenses, which may indicate streamlining of the operations.
- Its net income increased by 48.13% quarter-on-quarter due to increased operating income and a more than 3x increase in non-operating income. It had a net income of ₹ 6.51 crores.
Favorable Industry Trends
- Generic drugs have made it possible for people to afford healthcare expenses. Growing awareness about generic drugs has increased the demand all over the world. Syncom Formulations can grab a portion of the big Indian and international pharma products demand to improve its revenue.
- Globally, the population of developed countries is ageing at a tremendous speed, which has created a demand for chronic and age-related illness treatment drugs. It can be an important category for Syncom Formulations for growth with good prospects.
- The healthcare industry in India is growing at 22% CAGR since 2016. It has indirectly affected the growth of the pharmaceutical industry through increased demand for various medicines. The growth in the healthcare industry is a good signal for companies like Syncom Formulations in the pharma industry.
Analyst Ratings
According to Simple Wall Street, the fair value of Syncom Formulations based on the discounted cash flow model is ₹ 4.60. Thus, its CMP of ₹ 14.15 makes it overvalued by 207.40%. Its price-to-earnings ratio of 56.5x compared to the peer average of 40.9x makes it overvalued. The company has failed the share price liquidity and stability test due to the high volatility in its share price over the past three months. Compared to pharmaceutical industry earnings growing at 16.2%, Syncom Formulations’ earnings are growing at 12.5% annually, which is below industry standards.
Potential Scenarios Following an All-Time High
(Based on the chart of 1-day timeframe)
Converting numbers and candles into information can provide us with the market’s stance on the stock, which may help us make correct investment decisions. We have considered only those all-time highs that were made after a gap of at least a day. Since the listing of Syncom Formulations, it has made 3 all-time highs. In 2 of those highs, we have seen a sell-off on the second day of trading after a new all-time high was made. A similar situation can arise for the 3rd all-time high on the following days, which may need investors to exit the stock at the formation of the first bearish candle after 26 December 2023.
Syncom Formulations Stock Analysis: Potential Supports and Targets
Wed 27 Dec 2023 - In a remarkable market development, Syncom Formulations has soared to ₹16.90, setting a brand-new All Time High record! With this surge, there are chances of it becoming volatile, as many investors may like to book their profits by exiting or closing their positions. At this time potential investors and current stakeholders should keep an eye for opportunities for entry or exit.
Below you will find Syncom Formulations's metrics highlight, potential support and targets derived using Fibonacci Retracement and Extensions method, where Golden Ratio is assumed to be a good support (entry point) and Golden Extension to be good resistance (target point)
KEY PERFORMANCE METRICS
| Metrics | Value | Occured On |
|---|---|---|
| Close Price | ₹15.15 | Wed, 27 Dec 2023 |
| 52 Week High | ₹16.90 | Wed, 27 Dec 2023 |
| 52 Week Low | ₹4.60 | Wed, 29 Mar 2023 |
| All Time High | ₹16.90 | Wed 27 Dec 2023 |
The above table shows that the close price of Syncom Formulations on Wed, 27 Dec 2023 was ₹15.15. Notably, the All-Time High is same as the 52-Week High, indicating that the all-time high was achieved recently and it cloud be a strong resistance level which would need great upward momentum to break.
It's possible that some investors might consider booking profits near the 16.90 mark, which could apply downward pressure on the stock price.
But what does this newly created milestone signify for potential investors? Lets find out.
Syncom Formulations Fibonacci Retracement Or Support levels
For those considering an entry, the Golden Ratio (61.8%) retracement level of ₹9 offers a promising point, given the likelihood of a pullback from these levels as new investors might come in at these levels.
| Retracement or Support Levels | Values | |
|---|---|---|
| S1 | 23.6% | ₹13 |
| S2 | 38.2% | ₹12 |
| S3 | 50.0% | ₹10 |
| S4 | 61.8% (Golden Ratio) | ₹9 |
| S5 | 78.6% | ₹7 |
| S6 | 52 Week Low | ₹4 |
Note: This table was last updated on Wed, 27 Dec 2023.
Syncom Formulations Fibonacci Extensions Or Target levels
For those considering an exit, the Golden Extension (161.8%) level of ₹24 offers a promising point, given the likelihood of a downward momentum from these levels as investors might start booking their profits at these levels.
| Extensions or Target Levels | Values | |
|---|---|---|
| T1 | 52 Week High | ₹16 |
| T2 | 138.2% | ₹21 |
| T3 | 161.8% (Golden Extension) | ₹24 |
| T4 | 200% | ₹29 |
| T5 | 261.8% | ₹36 |
Note: This table was last updated on Wed, 27 Dec 2023.
Making Informed Investment Decisions
For any stock, reaching an all-time high is a significant milestone. Still, conducting thorough research and considering various factors is essential before making investment decisions. To make informed choices that align with your investment goals and risk tolerance, one needs to analyze the company’s fundamentals, industry trends, management’s strategy, and overall market conditions.
Company’s Financial Health
- In 2022, Syncom Formulations had a debt of ₹ 83.18 crores with a negative free cash flow of ₹ 13.23 crores and cash & equivalents of ₹ 0.88 crores. Compared to 2019, the debt levels have increased to a high level.
- In the short term, it has a liability of ₹ 113 crores covered by assets of ₹ 182 crores. The assets of ₹ 197 crores cover its long-term liabilities of ₹ 0.93 crores. It may need to sell a few of its assets to reduce the debt level and increase the free cash flow.
Industry Outlook
- The pharmaceutical industry is getting support from authorities of various countries for faster drug approvals, thus reducing the time taken from manufacturing a new drug to its consumption.
- Advancements in manufacturing technology will make drugs more efficient in the future. With a good supply chain, the spoilage of the medicines will be reduced, thus increasing the margin for the companies.
- An increment in the number of strategic partnerships can be seen among the companies involved in research & development. It may help in the creation of new drugs with less side effects and more efficiency.
Market Sentiment
Syncom Formulations achieves a new all-time high fuelled by strong quarterly revenue and improvement in operational efficiency. The rise was also aided by the favourable industry trends in the generic drugs market. The financial health of the company, reflected by a high level of debt and complex cash flows, requires prudent management. Overall, the prospects of Indian pharmaceutical companies are good from an international perspective. Still, the company may need to increase its spending on creating manufacturing facilities according to the quality standards of the major importers of drugs. Investors need to conduct detailed research, considering factors like company fundamentals, industry trends, and financial health, to make informed investment decisions.
