Buy Syrma SGS Technology; target of Rs 820: Motilal Oswal

Motilal Oswal is bullish on Syrma SGS Technology has recommended buy rating on the stock with a target price of Rs 820 in its research report dated July 24, 2025.

Broker Research

July 28, 2025 / 14:24 IST

BUY

26 Aug, 2025 12:21

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Motilal Oswal's research report on Syrma SGS Technology

Syrma SGS Technology (SYRMA) reported a strong operating performance, with EBITDA up ~94% YoY in 1QFY26. EBITDA margins expanded 530bp YoY due to a favorable business mix (lower share of low-margin consumer business at 34% in 1QFY26 vs. 53% in 1QFY25). Revenue declined 19%, largely led by a decline in the Consumer/IT and Railways businesses by 49%/50% YoY. With the order book continuing to improve to INR54-55b as of 1QFY26 (up ~21% YoY) and margins expanding, we expect SYRMA to witness a stronger FY26. Management has guided for 30-35% revenue growth and ~8.5%-9% EBITDA margins for FY26 (vs 8-8.5% margin earlier). Factoring in strong operating performance and changing business mix to higher-margin segments, we raise our earnings estimate for FY26/FY27 by 7%/10%. We reiterate our BUY rating on the stock with a TP of INR820 (35x FY27E EPS).

Outlook

We estimate a revenue/EBITDA/adj. PAT CAGR of 30%/40%/55% over FY25-27, driven by strong revenue growth and margin expansion. We reiterate our BUY rating on the stock with a TP of INR820 (premised on 35x FY27E EPS).

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