Hold Syrma SGS Technology; target of Rs 705: Prabhudas Lilladher

hold

Prabhudas Lilladher's research report on Syrma SGS Technology

Syrma SGS Technology (SYRMA) has reported robust earnings growth of ~145% YoY. This performance was driven by a healthy ~530bps YoY expansion in EBITDA margin to 9.2%, attributed to a favourable segment mix (with consumer contribution reducing to 34% revenue) and improved operating efficiency. SYRMA's Q1FY26 revenue decline by 18.6% YoY, due to major decline in consumer/IT & Railway segment ~48%/39% YoY. The company plans to focus more on high margin products aiming to reduce the consumer segment's contribution to 30% in FY26. Company order book stood at Rs 54- 55bn in Q1FY26, majorly driven from industrial and auto segment. SYRMA has guided revenue growth of 30% with EBITDA margin of 8.5-9.0% for FY26, revenue will be mainly driven by auto/industrial segment. Syrma SGS has formed a JV with Shinhyup Electronics Co. Ltd. to set up a multi/double-layer PCB manufacturing plant with a planned capacity of 1.5–2mn sqm with planned capex of USD 91mn over 3-5years. Company received PLI benefit of Rs40-60mn in Q1FY26.

Outlook

We have revised our FY26/FY27E EPS estimates upward by 9.5%/12.9%, with improvement in margin mainly with segment mix change. We estimate FY25-27E revenue/EBITDA/PAT CAGR of 31.7%/31.7%/34.3%. Maintain “HOLD.”

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Syrma SGS Technology - 25072025 - prabhu