Buy Syrma SGS Technology; target of Rs 711: ICICI Securities

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ICICI Securities research report on Syrma SGS Technology

We met Jasbir Singh Gujral, Managing Director, Syrma SGS. Takeaways: (1) The company is evaluating opportunities in the field of Outsourced Semiconductor Assembly and Test (OSAT). The company will benefit from the subsidies offered by the governments as it could potentially make this business line RoCE attractive. (2) It is likely to add new global clients, thereby continuing growth in the export market (>20% CAGR over FY24-26, in our view). (3) Syrma is aiming to on-board IT OEM customers for end-to-end assembly capabilities. (4) It is aiming to fund capex via remaining IPO proceeds and internal accruals. With expect Syrma to continue outperforming its peers given strong visibility on the order book.

Outlook

We remain constructive – maintain BUY with a DCF-based TP of INR 711 (implied P/E of 57x FY25E).

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Syrma SGS Technology - 07 - 11 - 2023 - isc