Financial Performance
Syrma SGS Technology reported total consolidated revenue of 4,857 Cr for FY26, representing a growth of 27 percent. When excluding the lower-margin consumer segment, core revenue growth was even stronger at 38 percent. The company achieved an operational EBITDA of 545 Cr, well ahead of its initial 400 Cr guidance.
Profit after tax stood at 346 Cr, showing a massive 87 percent increase compared to the previous year. Operating margins improved meaningfully by 270 basis points to reach 11.3 percent, aided by favorable product mix and operating leverage.
Management Outlook
For the upcoming fiscal year 2027, management has committed to a revenue growth target of 35 percent. They are aspiring to reach an absolute EBITDA of 700 Cr. Despite delivering 12 percent margins in the final quarter of FY26, management provided a conservative guidance of 10.5 percent to 11 percent for FY27.
This cautious stance is due to global geopolitical turmoil and rising metal prices. The company intends to focus on high-yield original design manufacturer business while maintaining a disciplined approach to working capital and capital allocation.
Business Overview
Syrma continues to diversify its portfolio across Automotive, Industrial, Healthcare, and IT/Railways. The IT and Railway segment was a standout performer, growing 182 percent year-on-year in the fourth quarter. The company added 32 new clients in FY26, expanding its reach in power management and medical technology.
Furthermore, the company has decided to drop its previously announced joint venture with Premier Energy and will instead focus on an 800 Cr greenfield project for multilayer printed circuit board manufacturing to better control its supply chain.
Sector Dynamics
The electronics manufacturing services industry is facing challenges from supply chain disruptions and volatile metal prices. Syrma management noted that while they have pass-through mechanisms with customers, there is typically a time lag before these adjustments take effect. On the regulatory front, the company expects to see Production Linked Incentive benefits starting from FY28.
Syrma also became the first Indian company to receive TISAX certification, an information security standard essential for the global automotive industry, positioning it well for future international contracts.
What to Watch
- Implementation and scaling of the 800 Cr multilayer PCB greenfield manufacturing project
- Ability to sustain margins within the 10.5-11 percent range amid rising raw material costs
- Order book execution against the current visibility of 6,600 Cr
- Growth momentum in the emerging IT and Railway electronics verticals
Core Growth Strategy
We are willing to sacrifice top line growth if the working capital cycle is elongated.
