Buy Syrma SGS Technology; target of Rs 618 Prabhudas Lilladher

buy

Prabhudas Lilladher's research report on Syrma SGS Technology

Syrma SGS Technology (SYRMA) has reported robust earnings growth of ~80% YoY. This performance was driven by a healthy ~510bps YoY expansion in EBITDA margin to 11.6%, attributed to a favourable segment mix (with consumer contribution reducing to 21% revenue) and improved operating efficiency. SYRMA's Q4FY25 revenue decline by 18.5% YoY, due to major decline in consumer/healthcare segment ~64%/20% YoY. The company plans to focus more on high margin products aiming to reduce the consumer segment's contribution from 35-36% in FY25 to 30% in FY26. Company order book stood at Rs 52-54bn in Q4FY25, majorly driven from industrial and consumer segment. SYRMA has guided revenue growth of 30-35% with EBITDA margin of 8% for FY26, revenue will be mainly driven by auto/industrial segment. The company plans to partner with credible technology players under the Electronic Components Manufacturing Scheme (ECMS). Company received PLI benefit of Rs80mn in Q4FY25 and Rs360mn in FY25.

Outlook

We have revised our FY26 EPS estimates upward by 5.2%, with improvement in margin mainly with segment mix change, while downward revise our earnings estimates for FY27, with reduction in revenue growth. We estimate FY25-27E revenue/EBITDA/PAT CAGR of 31.7%/29.2%/27.2%, with EBITDA margin contraction of ~30bps. Maintain “BUY.”

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Syrma SGS Technology - 15052025 - prabhu