Syrma SGS Technology - At The Right Place At The Right Time: ICICI Securities Initiates Coverage

ICICI Securities Report

Syrma SGS Technology Ltd. has established strong competitive advantages in electronics manufacturing services industry. Its competitive advantages include-

1. strong wallet share across companies in multiple industries,

2. large customers such as Hindustan Unilever Ltd. and TVS Motor Company Ltd. which speaks about the quality of Syrma’s products and services,

3. ability to offer original design manufacturing services and

4. multiple differentiated products to cater to various requirements of customers.

Syrma will gain from the strong growth opportunity (40% plus compound annual growth rate over FY22-26E) in EMS industry in India.

We model it to gain market shares as well as wallet shares in the printed circuit board assemblies and radio frequency identification segments.

We also model Ebitda margin expansion over FY22-FY25E due to operating leverage, benefits of production linked incentive schemes and correction in input prices. We forecast revenue and profit after tax CAGRs of 33.3% and 47.9%, respectively, over FY22-FY25E.

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