At a Glance
Syrma SGS is that over‑caffeinated electronics manufacturer who doubled profits but still wants you to pay Apple‑like premiums for its shares. Net profit (TTM) ₹214 Cr, revenue ₹3,571 Cr, P/E ~66×, PB ~7.6×. ROE barely scratches 10%, yet the market acts like it’s the next Foxconn 2.0. Investors—prepare to decode if it’s worth the hype.
Introduction
Imagine an EMS player in India wanting to be the next electronics giant—only it’s not selling iPhones, but PCBs, laptop assembly, and industrial components. Syrma SGS is riding the ‘Make in India’ bandwagon, signing deals with MSI, Dynabook, and adding plants faster than your coffee refills. The company’s stock is priced for future glory, not present reality. But hey, sometimes optimism pays—ask Tesla fans.
Business Model (WTF Do They Even Do?)
Syrma SGS offers turnkey electronics manufacturing services (EMS): from product design to volume production for OEMs. Its high-mix, medium-to-high volume model serves industrial, automotive, consumer electronics, and healthcare sectors. Revenue is diversified, but margins are slim (OPM ~9–10%). Light roast: they’re the backstage crew making tech shows happen—vital, but rarely in the spotlight.
Financials Overview
Numbers paint a classic growth vs. profitability battle:
- Revenue FY25: ₹3,787 Cr
- PAT FY25: ₹184 Cr (TTM ₹214 Cr)
- EPS: ₹11.3 (TTM)
- Market Cap: ₹13,283 Cr
- P/E: ~65.8×
- ROE/ROCE: 10.2% / 12.4%
- Debt: ₹665 Cr (D/E ~0.42)
Growth is sizzling (5Y sales CAGR 34%), but returns barely justify the hype. The P/E screams priced to perfection.
Valuation
Three approaches:
- P/E Based
Peer median P/E ~45×. EPS ₹11 → fair price ₹495. - EV/EBITDA
EBITDA ₹345 Cr, EV/EBITDA industry ~18× → EV fair ₹6,210 Cr → market cap fair ₹6,200 Cr → per share ₹350. - DCF/Relative
Conservative DCF gives ₹400–₹450; aggressive estimates near ₹600.
Fair value range: ₹350–₹500 vs. current ₹748. That’s a 40–100% premium.
What’s Cooking – News, Triggers, Drama
- JV with Shinhyup (July 2025) to manufacture PCBs in India—strategic, potentially margin accretive.
- Dynabook & MSI partnerships to make laptops domestically—big tailwind if executed.
- ₹1000 Cr QIP approved (May 2025)—equity dilution incoming.
- New subsidiaries (May 2025) for electronics expansion.
- NCLT amalgamation (Aug 2024) streamlined corporate structure.
Triggers are solid but need execution to translate into earnings.
Balance Sheet
| Item | ₹ Cr |
|---|---|
| Total Assets | 4,205 |
| Total Liabilities | 4,205 |
| Equity (Reserves + Capital) | 1,750 |
| Borrowings | 665 |
Auditor quip: Leverage is creeping up with expansions. Net debt remains manageable, but watch for post-QIP moves.
Cash Flow – Sab Number Game Hai
| Year | Operating | Investing | Financing | Net Cash |
|---|---|---|---|---|
| 2023 | –70 Cr | –885 Cr | +968 Cr | +13 Cr |
| 2024 | –114 Cr | –9 Cr | +155 Cr | +32 Cr |
| 2025 | +176 Cr | –105 Cr | –71 Cr | +1 Cr |
Operating cash flow turned positive in FY25—good. But earlier years burned cash like festival crackers.
Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 10% |
| ROCE | 12% |
| P/E | 66× |
| PAT Margin | 6% |
| D/E | 0.42 |
Stand-up line: Ratios are like a diet plan—looks okay on paper but reality bites when growth slows.
P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT |
|---|---|---|---|
| 2023 | 2,048 Cr | 192 Cr | 123 Cr |
| 2024 | 3,154 Cr | 203 Cr | 124 Cr |
| 2025 | 3,787 Cr | 323 Cr | 184 Cr |
Earnings growth is strong in FY25, PAT up 48%. But margins remain thin.
Peer Comparison
| Peer | Revenue | PAT | P/E |
|---|---|---|---|
| Kaynes Tech | 2,891 Cr | 317 Cr | 134× |
| Honeywell Auto | 4,412 Cr | 512 Cr | 67× |
| Jyoti CNC | 1,818 Cr | 109 Cr | 71× |
| Syrma SGS | 3,787 Cr | 184 Cr | 66× |
Peers also trade at high P/Es, but Syrma’s returns lag peers.
Miscellaneous – Shareholding, Promoters
Promoter holding stable at ~46%. FIIs fell from 12% to 6%, DIIs rose slightly, public at ~38%. No pledges.
Promoter roast: They keep control but FIIs are quietly leaving the party.
EduInvesting Verdict™
Syrma SGS is a growth story wrapped in India’s electronics manufacturing narrative. The company’s partnerships, JVs, and expansions could catapult it into higher leagues. However, current profitability and ROE don’t justify a 66× multiple. Add in QIP dilution and execution risk—this stock is priced like a tech unicorn but delivers like a diligent startup.
SWOT Snapshot:
- Strengths: Strong growth, Make in India tailwinds, big partnerships.
- Weaknesses: Thin margins, low ROE, high receivable days.
- Opportunities: Laptop/PCB localization, JV synergies, export expansion.
- Threats: Execution delays, global EMS competition, FII sell-off.
Conclusion: Great business, ambitious plans, but the valuation is riding the hype wave. Unless Syrma ramps margins and cash flows, investors may face turbulence. Long-term bulls can stay strapped in; short-term traders—be wary of turbulence at 40,000 ft.
Written by EduInvesting Team | August 1, 2025
SEO Tags: Syrma SGS Technology, EMS stocks India, electronics manufacturing, Make in India, stock analysis
