Syrma SGS Technology - Strong Growth Momentum To Continue: ICICI Securities
With correction in input prices, we model Syrma's margins to improve and inventory days to reduce.
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ICICI Securities Report
With recovery in auto production and electric vehicles, we expect demand for printed circuit boards assemblies to increase resulting in higher domestic sales for Syrma SGS Technology Ltd. With correction in input prices, we model its margins to improve and inventory days to reduce.
We believe there is still no material impact of China Covid wave on the supply chain (China being a key country for sourcing raw materials).
However, we do expect exports to be hit in the near term due to steep inflation and likely recession in the developed countries.
We forecast Syrma to gain market shares as well as wallet shares in the printed circuit boards and radio frequency identification segments. We also model Ebitda margin expansion over FY22-FY25E on the back of operating leverage, benefits of production linked incentive schemes and correction in input prices.
We model revenue and profit after tax compound annual growth rates of 33.3% and 47.9% respectively over FY22- FY25E.
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