Syrma SGS Technology's shares have surged 144% in 2026 as the electronics manufacturer expands beyond traditional contract manufacturing into design-led electronics manufacturing, specialised sectors and printed circuit board (PCB) production.
The company is increasing its focus on original design manufacturing (ODM), where manufacturers participate in product design and development rather than simply assembling products based on customer specifications. The shift is helping Syrma move up the electronics value chain and expand its presence in automotive, healthcare, defence and railways.
Its expansion plans include a Rs 1,600 crore greenfield PCB facility in Andhra Pradesh, new international partnerships and acquisitions aimed at entering specialised electronics markets.
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However, the transition is still underway, with several growth initiatives in the investment or scale-up phase. At Rs 1,733 per share, Syrma trades at around 90 times earnings, above its five-year median price-to-earnings multiple of 67 times.
The key question for investors is whether the company's expanding capabilities, order book and higher-margin business mix can support the valuation as new projects move towards commercial production.
ODM Drives Growth
Syrma reported operating revenue of Rs 1,588.6 crore in Q1 FY27, up 66.7% year-on-year. ODM revenue increased 115% to Rs 270 crore, following 27.3% growth in FY26.
ODM accounted for 17% of revenue in Q1 FY27, with the remaining 83% coming from electronics manufacturing services (EMS), including contract assembly and build-to-print manufacturing.
The ODM contribution stood at 17% in both FY26 and Q1 FY27, compared with 12% in FY25.
Management plans to increase ODM's share of revenue to 18% to 19% in the near term and 25% over the long term. To achieve the latter target, it expects ODM revenue to grow at a compound annual growth rate of 50% to 60% over the next several years.
The shift is significant because traditional EMS manufacturers largely execute designs provided by customers. ODM gives manufacturers a greater role in product design and development, allowing them to capture more value beyond assembly.
The changing business mix is also reflected in margins. Syrma's consolidated gross margin increased from 22.6% in FY25 to 25.6% in FY26, supported by a higher contribution from ODM and exports, both of which carry higher margins than standard contract manufacturing.
Exports grew 61% year-on-year to Rs 387 crore in Q1 FY27, accounting for 24% of operating revenue.
The company is also securing multi-year framework agreements with international customers, allowing it to become part of their longer-term manufacturing plans.
Syrma has signed a multi-year framework agreement worth more than Rs 2,000 crore with a global OEM across automotive, industrial systems and healthcare. The agreement is expected to reserve manufacturing capacity for two to three years.
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New Growth Avenues
Syrma is expanding its ODM business in sectors where electronics content is increasing and customer relationships can extend over several years.
Automotive revenue grew 78% year-on-year to Rs 394.9 crore in Q1 FY27, accounting for 25% of operating revenue. Growth was supported by rising electronic content in vehicles.
The company supplies products such as electric vehicle battery management systems, motor controllers and charging infrastructure.
Healthcare is another expanding segment. Healthcare and MedTech revenue doubled year-on-year to Rs 134.5 crore in Q1 FY27, accounting for 8% of revenue.
On September 22, 2026, Syrma inaugurated a medical plastics and precision moulding facility in Jodhpur to strengthen its MedTech manufacturing capabilities.
During the quarter, it also added two healthcare customers for contract development and manufacturing services.
Management expects the MedTech business to grow around 50% in FY27, with revenue targeted at more than Rs 300 crore.
Syrma is also entering specialised electronics markets through acquisitions and partnerships.
The company acquired a 60% stake in Elcome to enter the defence and maritime electronics sector. Management expects the business to generate baseline annual revenue of Rs 200 crore to Rs 300 crore, with EBITDA margins of 20% to 25%.
It expects the business to grow 30% to 35% annually and is evaluating additional technologies in radar, sonar and communication electronics.
Revenue from the IT and railway sectors increased 199% year-on-year to Rs 149.7 crore in Q1 FY27, contributing 9% of operating revenue.
Syrma has formed a joint venture with Italian company Elemaster to manufacture PCB assemblies and provide box-build integration for railway, industrial and medical applications.
The partnership also expands its capabilities in railway safety systems, including the Kavach train protection system.
Meanwhile, Syrma is managing its relatively lower-margin consumer electronics business with a focus on profitability and cash flow rather than aggressive volume expansion.
Revenue from the segment rose 68% year-on-year to Rs 532.8 crore, accounting for 34% of total revenue. Faster customer ramp-ups, higher consumer telecom volumes and front-loaded schedules from key clients supported growth.
Global Partnerships
Syrma is using international partnerships to access new customers and expand its manufacturing relationships with global OEMs.
The company has established a 60:40 joint venture with Japan's Kaga Electronics. The venture will meet Kaga's EMS requirements in India and serve Japanese OEM demand in domestic and overseas markets.
Management expects the partnership to develop into a business worth Rs 300 crore to Rs 500 crore within three to five years.
The partnership forms part of Syrma's strategy to become an integrated manufacturing partner for global customers diversifying their supply chains.
PCB Expansion
Syrma's Rs 1,600 crore greenfield bare-board PCB facility in Andhra Pradesh is a major step towards expanding its manufacturing capabilities.
The company currently focuses primarily on assembly and system integration. Manufacturing bare-board PCBs would add another stage to its electronics value chain and help reduce India's reliance on imported boards.
Around 90% of domestic PCB demand is currently met through imports.
The Indian bare PCB market was valued at around $6.3 billion in 2024 and is projected to reach $24.7 billion by 2033.
To develop the facility, Syrma has formed a 75:25 joint venture with South Korea-based Shinyup, which has more than 35 years of experience in bare-board PCB manufacturing.
The first phase will manufacture single-sided, double-sided and multilayer PCBs. The second phase includes plans for high-density interconnect boards, flexible PCBs and an in-house copper-clad laminate (CCL) facility.
The CCL plant will supply raw materials to Syrma and other domestic PCB manufacturers.
Commercial production is scheduled to begin by April 2027. Management expects initial capacity utilisation of 40% to 50%, with EBITDA margins of around 10%.
At utilisation levels above 80%, the facility has estimated annual revenue potential of around Rs 2,400 crore and EBITDA of Rs 360 crore to Rs 432 crore, based on projected margins of 15% to 18%.
These estimates exclude government incentives.
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Earnings Momentum
Syrma delivered strong growth in Q1 FY27, with operating revenue increasing 66.7% year-on-year to Rs 1,588.6 crore.
EBITDA, excluding other income, rose 68.8% to Rs 161.6 crore, taking the margin to 10.2%. Net profit increased 111.7% to Rs 105.7 crore.
Return on capital employed stood at 17.3%, while return on equity was 11.1%.
The growth reflected an improved business mix and higher contributions from ODM and exports.
As of June 2026, Syrma's order book stood at Rs 6,770 crore. Consumer electronics accounted for 30%, followed by automotive at 29% and industrials at 24%.
IT and railways contributed 9%, while healthcare and MedTech accounted for 7%.
Of the total order book, Rs 5,400 crore was scheduled for execution over the following 12 months, providing revenue visibility.
The diversified order book reduces dependence on a single end market and gives the company exposure to rising electronics penetration across industries.
Syrma also has a broad customer base, with its top 20 customers accounting for 66% of Q1 FY27 revenue.
Valuation And Risks
At Rs 1,733 per share, Syrma trades at around 90 times earnings, above its five-year median P/E of 67 times.
Avalon Technologies, another listed electronics manufacturing services company, trades at around 117 times earnings.
Syrma's valuation reflects expectations of growth from ODM, new business verticals and its PCB expansion. However, several of these opportunities remain in the investment or scale-up phase.
Execution will be important as the company moves towards commercial production at its new PCB facility and expands its specialised electronics businesses.
Key risks include global supply chain disruptions, component shortages, extended lead times and higher working capital requirements as the company maintains strategic inventory buffers.
The sustainability of the rally will depend on how effectively Syrma converts its expanding capabilities, customer agreements and order book into revenue, margins and cash flow.
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Disclaimer: The views expressed in this article are solely those of the author and do not necessarily reflect the opinion of NDTV Profit or its affiliates. Readers are advised to conduct their own research or consult a qualified professional before making any investment or business decisions. NDTV Profit does not guarantee the accuracy, completeness, or reliability of the information presented in this article.
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