Syrma SGS Tech Skyrockets: 62% Profit Surge, Defence & Solar Entry! Is This India's Next Big Manufacturer?

Brokerage Reports

|

Updated on 13 Nov 2025, 09:34 am

Syrma SGS Technology announced impressive financial results for the second quarter of fiscal year 2026 (Q2FY26), showcasing a robust ~62% year-over-year (YoY) increase in its profit. This significant growth was achieved through a favourable segment mix, which reduced the contribution of the consumer segment to 32% of revenue, and improved operating efficiency, leading to a 150 basis points YoY expansion in its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin to 10.1%. The company also marked four strategic milestones in Q2FY26: 1) Acquired a stake in Elcome Systems, marking its entry into the Defence & Maritime business. 2) Formed a Joint Venture (JV) with Shinhyup for PCB (Printed Circuit Board) manufacturing. 3) Acquired 49% in KSolare Energy Pvt Ltd, entering the renewable energy space. 4) Formed a JV with Italy-based Elemaster. Syrma SGS Technology's order book was Rs 58 billion in Q2FY26, with substantial contributions from the industrial and auto segments. The company has guided for FY26 revenue growth of 30%, expecting an EBITDA margin of 9.0%+. It also anticipates receiving Production Linked Incentive (PLI) benefits amounting to Rs 200-250 million in FY26. Impact This news is highly positive for Syrma SGS Technology, indicating strong operational execution and strategic diversification. The acquisitions and JV's position the company for future growth in high-potential sectors like defense and renewables. The robust order book and positive guidance suggest continued financial strength. For the Indian stock market, this signifies resilience and growth potential within the manufacturing and technology sectors, which are key focus areas for the Indian economy. Rating: 8/10

Definitions: * YoY (Year-over-Year): A comparison of financial data from the current period to the same period in the previous year. * EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization): A measure of a company's operating performance, excluding financing, accounting, and capital investment decisions. * EBITDA margin: EBITDA divided by total revenue, expressed as a percentage, indicating profitability per unit of revenue. * Segment mix: The proportion of revenue contributed by different business units or product lines within a company. * Operating efficiency: How effectively a company uses its resources to produce goods or services, often reflected in lower costs and higher output. * JV (Joint Venture): A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task. * PCB (Printed Circuit Board): A board used to mechanically support and electrically connect electronic components using conductive tracks, pads and other features etched from copper sheets laminated onto a non-conductive substrate. * PLI (Production Linked Incentive): A scheme by the Indian government to boost domestic manufacturing and exports by providing incentives on incremental sales of manufactured goods. * FY26 (Fiscal Year 2026): The financial year ending in March 2026. * CAGR (Compound Annual Growth Rate): The mean annual growth rate of an investment over a specified period of time longer than one year. * TP (Target Price): The price at which a stock analyst or brokerage firm expects the stock to trade in the future. * Earnings: The profit made by a company in a given period.