Accumulate Syrma SGS Technology; target of Rs 1788: Prabhudas Lilladher

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Syrma SGS Technology has revised its FY27 revenue growth guidance upward to 40-45% from 30-35%, driven by a strong order book of ~INR74bn and increasing export revenue, which is expected to exceed INR17bn in FY27.
  • The company expects to cross the US$1bn revenue mark in FY28, with EBITDA margins improving to 10.5-11.0% due to higher contributions from margin-accretive businesses such as ODM, exports, PCB, and magnetics.
  • The PCB project is progressing as planned, with trial production and customer approvals expected to take approximately three to six months, followed by commercial production around Sept'27, and is expected to generate revenue of INR2.0-2.5bn in FY28.
  • The company has applied for approximately five to six projects under the ECMS scheme, covering PCBs, CCL, HDI Flex, camera modules, and magnetics, which are expected to be commissioned in a phased manner over the coming years.

Thesis Validation Checklist

  • Investors should watch for the company's ability to achieve its revised revenue growth guidance and expand its export revenue, as well as the progress of the PCB project and other initiatives under the ECMS scheme.
  • Key signals to monitor include the company's order book, revenue mix, EBITDA margins, and cash flow generation, as well as the overall demand trends in the automotive, consumer, and industrial segments.
  • Any changes in the regulatory environment, particularly with regards to the ECMS scheme and other government initiatives, could also impact the company's growth prospects.