Syrma SGS Technology Limited Q3 FY26 Earnings Call Summary

Summary

Syrma SGS Technology Limited - Q3 FY 2026 Earnings Call Summary Friday, January 30, 2026, 10:30 AM IST

Event Participants

Executives 5 Bijay Agrawal (CFO), J.S. Gujral (Managing Director), Jayesh Doshi (Director), Nikhil Gupta (Head IR), Satendra Singh (CEO)

Analysts 8 Aniruddha Joshi (ICICI Securities), Dhaval Shah (Girik Capital), Dhrumil Wani (Girik Capital), Keshav Lahoti (HDFC Securities), Manan Goyal (ICICI Securities), Naushad Chaudhary (Aditya Birla MF), Sameet Sinha (Macquarie), Sonali S. (Jefferies), Sumant Kumar (Motilal Oswal)

Financials & KPIs

Geographic & Segment Commentary

• Exports: Achieved 66% YoY growth in Q3; management expects to cross ₹1,100 crores in FY26. Growth is driven by Industrial and Med-tech exports to Europe (35%) and USA (5%).
• Automotive: Grew by 30% YoY; strategic focus remains on lighting, infotainment, and the emerging EV ecosystem supported by the new EU-India FTA.
• Industrial & Consumer: Industrial grew 29% YoY, driven by power supplies and smart meters (₹50cr in Q3). Consumer (31% of revenue) is led by telecom (set-top boxes, GPON) and ODM water purification.
• IT & Railways: Grew 70% YoY from a low base; Railways contributed ₹18 crores in Q3. Outlook remains strong as the company builds specialized segment competencies.

Company-Specific & Strategic Commentary

• PCB Project: Groundbreaking completed for the Bare PCB plant (Andhra Pradesh); trial production expected by Dec '26. Phase 1 capex of ₹360-₹400 crores targeting 720k sqm multilayer and 480k sqm single-layer capacity.
• Elcome Acquisition: Deal closed mid-December; provides a strategic entry into the high-margin (20%+) defense vertical. Expected to contribute ₹280-₹300 crores annually to the top line.
• Operational Excellence: Partnered with Ark Systems for real-time SMT line monitoring across 40 lines. Management targets a 5% efficiency gain, equivalent to adding two new production lines.
• ESG Rating: Upgraded from Bronze to Gold rating by EcoVadis, placing Syrma in the top 5% of companies globally for ESG compliance.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Margin Sustainability

• Question: What led to the 12.6% margin and is it sustainable? (Sonali S., Jefferies)
• Answer: Growth was driven by a 66% surge in high-margin exports and industrial segments. While scale improved operating leverage, management guides for a 10% blended EBITDA margin long-term. (J.S. Gujral & Bijay Agrawal)

PCB Project Details

• Question: What is the target market for the Bare PCB plant? (Tanay Shah, DAM Capital)
• Answer: Initial focus is on high-volume single and multilayer PCBs (up to 8 layers) for Industrial, Auto, and Energy Metering. Higher-layer boards for Med-tech will follow after longer approval cycles. (J.S. Gujral)

Smart Meter Slowdown

• Question: Why is smart meter revenue stagnant at ₹50cr per quarter? (Keshav Lahoti, HDFC Securities)
• Answer: Selection is intentional to manage working capital. Management prefers customers who provide free-of-cost controllers or shorter payment cycles to maintain positive cash flow. (J.S. Gujral)

Capex Funding

• Question: How will the PCB project be funded? (Dhaval Shah, Girik Capital)
• Answer: The project is eligible for a 50% subsidy from the AP government (as bridge financing). Syrma’s equity portion will be partially funded by its technical collaborator (25% of equity). (J.S. Gujral & Bijay Agrawal)

Key Takeaway

Syrma SGS delivered a breakout third quarter, characterized by a 45% revenue jump to ₹1,274 crores and a doubling of EBITDA to ₹159 crores. Performance was bolstered by a 66% growth in exports and the successful consolidation of Elcome, marking the company’s entry into the high-margin defense sector. Strategic focus is currently centered on the Bare PCB project, which remains on track for trial production by late 2026, and operational efficiency gains via real-time SMT monitoring. Despite domestic challenges in the smart meter segment’s cash flow, the company achieved positive 9M operating cash flow. Management increased its FY26 EBITDA guidance to over ₹500 crores and maintains a confident 30% growth outlook for FY27, supported by a robust ₹6,400 crore order book. Syrma is well-positioned to capitalize on the new EU-India FTA and the global “China Plus One” shift in electronics manufacturing.