Syrma Q4 Results Review - Strong Revenue Growth; Margin Improves Sequentially: ICICI Securities

ICICI Securities Report

Noteworthy observations from Syrma SGS Technology Ltd.’s Q4 FY24 result:

1. Strong growth (+66.9% YoY) led by ~Rs 1 billion revenue shift from December 2023 to Jan-24 and high demand momentum across all segments.

2. Healthcare segment posted robust 147.6%/68.3% YoY/QoQ growth on a favourable basis, indicating early signs of revival. Higher revenue in healthcare segment is margin accretive.

3. The cumulative contribution of volume-based segments of automotive and consumer has increased substantially over the past two years. It is likely to have weighed on margins.

4. Export segment revenue contribution stood at 23%/26% in Q4 FY24/FY24, respectively.

We believe Syrma is likely to continue its strong revenue growth momentum over the next two years led by strong orderbook and capacity expansion.

We cut our earnings estimates to factor in lower profitability from Q4/FY24. We remain constructive on Syrma and maintain Buy with a revised DCF based target price of Rs 600 (implied price/earning of 38 times FY26E; earlier target price: Rs 675).

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