Syrma SGS's Defence Push: ₹235 Cr Deal for Elcome & Navicom, Q2 Profit Skyrockets 78%!

Syrma SGS Technology Limited's Board has approved a significant strategic expansion into defence and maritime equipment manufacturing by acquiring Elcome Integrated Systems, a Mumbai-based company. The acquisition will be executed in four tranches, starting with a 60% stake purchase for an aggregate consideration of around ₹235 crore. The pricing of subsequent tranches will be performance-based. Elcome Integrated Systems will, as part of the deal, acquire the entire share capital of Navicom Technology International, also based in Mumbai, making Navicom a wholly-owned subsidiary upon completion of Syrma's first tranche. Both Elcome and Navicom are established manufacturers in the defence and maritime equipment space, reporting revenues of ₹155 crore and ₹52 crore, respectively, for FY25.

This expansion aligns with Syrma SGS's recent financial successes. For the quarter ended September 2025 (Q2FY26), the company posted a robust 78% year-on-year increase in consolidated net profit, reaching ₹64 crore from ₹36 crore in the previous year. Consolidated revenue from operations also saw a substantial 38% jump to ₹1,145 crore from ₹832 crore. For the half-year ended September, total consolidated revenue stood at ₹2,090 crore. The company attributes its growth to strong traction in the EMS industry, driven by tailwinds across Auto, IT, and Industrials segments. Syrma SGS also recently entered a joint venture with South Korea's Shinhyup Electronics for manufacturing various electronic components.

Impact Rating: 8/10

Difficult terms: * **EMS (Electronics Manufacturing Services)**: Companies that design and manufacture electronic products on behalf of other companies. * **Tranches**: Separate portions or installments of a payment or acquisition. * **Aggregate consideration**: The total price or sum of money paid for the acquisition. * **Performance milestones**: Specific achievements or targets that must be met for subsequent payments or stages of a deal. * **Paid-up share capital**: The amount of money a company has received from shareholders in exchange for stock. * **Wholly-owned subsidiary**: A company controlled entirely by a parent company. * **FY25 (Fiscal Year 2025)**: The financial year ending in 2025. * **Q2FY26 (Second Quarter of Fiscal Year 2026)**: The financial quarter from July to September of the fiscal year 2026. * **Consolidated net profit**: The combined profit of a parent company and its subsidiaries, after accounting for intercompany transactions. * **Consolidated revenue from operations**: The total income generated from the primary business activities of a parent company and its subsidiaries. * **Joint venture**: A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task. * **Multi-layer printed circuit boards**: Electronic circuit boards composed of multiple layers of conductive material and insulating material, used in complex electronic devices.