Accumulate Syrma SGS Technology Ltd for the Target Rs 1,788 by Prabhudas Liladhar Ltd
Healthy Order Book Underpins Multi-Year Growth
Syrma SGS Technology reported a strong Q2FY27 performance, with revenue growth guidance upgraded to 40–45% from 30–35%, implying FY27. The company expects to cross the US$1bn revenue mark in FY28, with EBITDA margins guided at 10.0–10.5% in FY27 and improving to 10.5–11.0% in FY28, driven by higher contributions from marginaccretive businesses such as ODM, exports, PCB and magnetics. Export revenue guidance has been raised to over INR17.0bn in FY27, with further growth to ~INR20.0bn in FY28. The order book and revenue visibility stood at INR74.2bn as of Sep’26, led by automotive, consumer and industrial segments. We estimate Revenue/EBITDA/PAT CAGR of 36.5%/35.4%/38.8% over FY26-29E. We have revised our FY28/FY29 EPS estimates downgrade by 2.3%/2.1% with a TP of INR 1,788 (earlier INR 1,827), valuing at 45x Sept’28 earnings. We upgrade our rating to ‘ACCUMULATE’ from ‘HOLD’ due to recent correction in the stock price.
Q2FY27 financial performance:
Revenue grew by 73.6% YoY at INR 19.8bn (PLe: INR 17.1bn). Auto/Consumer/Healthcare/ Industrials/IT & Railway segment grew by 90.7%/56.6%/60.7%/86.3%/69.4% YoY, Exports-to-domestic revenue mix stood at 26:74 in Q2FY27, with exports growing 91% YoY while the domestic business registered a strong 68% YoY growth. EBITDA grew by 67.7% YoY to INR 1.9bn (PLe: INR 1.7bn). EBITDA margins contracted by ~30bps to 9.7% (PLe: 10%). PBT grew by ~84.6% YoY to INR 1.6bn (PLe: INR 1.5bn). PAT grew by 87.2% YoY to INR 1.2bn (PLe: INR 1.1bn).
H1FY27 financial performance: Revenue grew by 71.2% YoY at INR 35.7bn. EBITDA grew by 75.8% YoY to INR 3.5bn. EBITDA margins expanded by ~30bps to 9.9%. PBT grew by 107.4% YoY to INR 3bn. PAT grew by 114.5% YoY to INR 2.2bn.
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SEBI Registration number is INH000000933
