Syrma SGS Technology Ltd

Target and structure

• Target: SYRMA KAGA ELECTRONICS PRIVATE LIMITED, Indian subsidiary.
• Jointly formed with Kaga Electronics India Pvt Ltd; Syrma SGS 60%, Kaga 40%.

Size and status

• Size/turnover not applicable; newly incorporated; to commence operations.

Related party and governance

• Related party subsidiary; Syrma SGS promoter.
• Investment treated as related party; arms' length.
• Board approvals for related party transaction obtained.

Industry and target profile

• Industry: electronics components, PCBs, board loading, interface cards.

Objects and rationale

• Purpose: manufacture PCBs, load components, interface cards; electronic components.

Regulatory and timeline

• Regulatory approvals: Not applicable.
• Indicative completion timeline: Not applicable.

Consideration and ownership

• Payment: cash; 60% equity for Rs 60,000.
• Shareholding: Syrma 60%, Kaga 40% in SKEPL.
• Share count: 6,000 shares of Rs 10 face value.

Background of target

• Incorporated Aug 18, 2026; located in Haryana, India.
• Business: electronics design, assembly, and manufacturing.

Meeting Details

• Date and time: 13 August 2026, 09:00–18:00 IST.
• Meeting type and mode: One-on-one and group meetings; physical in Mumbai, India.
• Event/organiser: Equirus Annual India Conference.
• Location: Mumbai, India.

Participants

• Key participants from the company: Management representatives.

Purpose

• Purpose: general investor interaction and discussions on business outlook.

Availability

• Information to be hosted on the company investor relations site.

Dematerialisation/rematerialisation status

• Regulation 74(5) not applicable; all shares are in demat form.
• RTA has not received any REMAT requests for the quarter ended 30 June 2026.

Business overview

• Syrma SGS is an ESDM platform serving global OEMs across high-growth electronics sectors.
• Core segments include automotive, consumer, industrials, healthcare, railways, and IT.

Operational highlights

• Operates 17 manufacturing facilities, four global R&D centers, and 10,000+ employees.
• Expanded through acquisitions and JVs in maritime defence, rail, and PCB manufacturing.
• Announced a 75:25 PCB JV in Naidupeta with ~₹1,600 crore phased capex.

Financial performance

• FY26 revenue rose 27% to ₹48,569 million; EBITDA rose 56% to ₹5,823 million.
• FY26 PAT increased 87% to ₹3,458 million; EBITDA margin improved to 12.0%.
• Q4 FY26 revenue rose 57% YoY to ₹14,768 million; PAT rose 67% to ₹1,192 million.
• FY26 segment growth was strongest in IT and Railways, up 74%, and Healthcare, up 36%.

Capital structure & liquidity

• Debt fell to ₹3,531 million from ₹6,112 million, reducing debt-to-equity to 0.1.
• Cash and equivalents increased to ₹8,203 million, resulting in net cash of ₹4,672 million.
• Operating cash flow was ₹2,896 million in FY26, with capex and investments of ₹7,420 million.

Strategic priorities & outlook

• Management is targeting growth in automotive, consumer, industrial, healthcare, rail, and defence electronics.
• Key growth drivers include India manufacturing incentives, China+1 sourcing, and export expansion.
• The PCB JV is intended to complete the value chain from bare PCB to system build.

Risks & mitigation

• Key risks include competition, client concentration, demand volatility, and integration of acquisitions.
• Mitigation includes certification-led manufacturing, diversification, and backward integration into PCB production.

Governance & leadership

• Board and management details were disclosed, including Executive Chairman Sandeep Tandon and MD Jasbir S. Gujral.
• ESG oversight is led by an ESG subcommittee with quarterly board updates.
• Women represent over 40% of the workforce, and the company reported EcoVadis Gold and SBTi registration.

Appointment of Whole Time Director

• Mr. Jayesh Nagindas Doshi appointed Whole Time Director effective April 1, 2026
• Term of appointment is five years from April 1, 2026
• Appointment proposed due to internal restructuring and his role in the company
• Mr. Doshi is a Chartered Accountant and Law graduate with 37 years experience
• He has expertise in corporate finance, M&A, investments across diverse industries
• Previously Whole Time Director & Group CFO at Dalmia Bharat Ltd
• Associated with Tandon Group since January 2021 as Investment Director
• Led Syrma SGS IPO in August 2022, oversubscribed 35 times
• No relationships with other directors disclosed
• Not debarred from holding director office by SEBI or other authorities

Financial Performance 📊

• Q3 FY26 revenue grew 43% YoY to INR1,274 crore; 9M revenue up 17% YoY to INR3,380 crore.
• Q3 EBITDA doubled YoY to INR159 crore; 9M EBITDA rose 78% YoY to INR370 crore with 11% margin.
• Q3 PAT grew 108% YoY to INR110 crore; 9M PAT at INR227 crore, doubling YoY.
• Export revenue in Q3 at INR335 crore, up 65% YoY; 9M exports at INR837 crore, up 45% YoY; export mix 25% of revenue.
• Gross debt INR529 crore; treasury balance INR933 crore; net cash position INR404 crore as of Dec 2025.
• Order book INR6,400 crore: 31% auto, 27% industrial, 25% consumer, balance healthcare/IT/railways.

Segment & Business Drivers 🚗🏥🏭

• 9M FY26 segment growth: Auto 30%, Med-tech 31%, Industrial 29%, IT/Railways 70% YoY.
• Consumer steady at ~30% revenue; telecom (set-top boxes, GPON) and ODM (water purifiers, RFID) key drivers.
• Industrial includes power supplies, exports, metering; smart meters contributed ~INR50 crore in Q3.
• IT & Railways Q3 revenue INR82 crore; railways INR17-18 crore.
• Exports mainly industrial and med-tech; 90% industrial exports to Europe; med-tech primarily to USA.
• Elcome acquisition adds INR280-300 crore revenue in FY26; margins 20-25%; 10-15% growth expected next year.

Management Commentary & Guidance 🔮

• FY26 revenue guidance INR4,850-5,000 crore; EBITDA >INR500 crore (58% growth YoY).
• FY27 guidance: 30% revenue and EBITDA growth; export growth 25-30%.
• PCB capex INR360-400 crore in FY26 and similar in FY27; 50% government subsidy; phased over FY26-FY30.
• Smart meter revenue revised to ~INR200 crore in FY26; 20-30% growth expected next year.
• Tax rate guidance: 23-24% in Q4 FY26; ~26% in FY27.
• Operational efficiency target: 1.5% gross margin and 3% EBITDA margin improvement YoY.

Q&A Highlights ❓

• Consumer growth driven by telecom and ODM products.
• Smart meter Q3 revenue ~INR50 crore; selective customer approach due to working capital cycles.
• Q4 revenue expected INR1,600+ crore; Elcome to contribute INR100-120 crore; no Elemaster revenue expected.
• Margin improvement driven by export growth and industrial scale; sustainable blended EBITDA margin ~10%.
• PCB capex INR360-400 crore in FY26; targeting industrial and automotive segments with 15-17% EBITDA margin.
• PLI incentive annualized at INR30-32 crore; no quarter-on-quarter abnormal variation.
• Debt interest cost reduced despite higher closing debt due to refinancing and negotiation.
• Capex funding: 50% equity for PCB project; 25% equity from partner; 50% government subsidy expected.
• Net working capital days targeted to reduce by 3-5 days over next 2-3 quarters.