Buy Syrma SGS Technology; target of Rs 540: Motilal Oswal

Buy

Motilal Oswal's research report on Syrma SGS Technology

SYRMA reported a weak operating performance in 1QFY25, with EBITDA margins declining 230bp YoY due to an unfavorable business mix (higher share of low-margin consumer business at 53% in 1QFY25 vs. 39% in 1QFY24). However, revenue growth was robust at 93% YoY, majorly driven by consumer segment (up 2.7x YoY). Factoring in the 1QFY25 performance, we have lowered our EPS estimate for FY25 by 7% while maintaining FY26E EPS. We retain our BUY rating on the stock with a TP of INR540 (35x FY26E EPS).

Outlook

Factoring in the 1QFY25 performance, we have lowered our EPS estimate for FY25 by 7% while maintaining FY26E EPS. We retain our BUY rating on the stock with a TP of INR540 (35x FY26E EPS).

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