Syrma SGS Targets 7% Ebitda Margin, Revenue Growth Above Industry Level In FY25 After Robust Q3
MD JS Gujral said that the company’s strategies have resulted in a better Ebitda margin, which was recorded at 5.9% in Q3 of the last fiscal.
Syrma SGS Technology aims to achieve an Ebitda margin of at least 7% and exceed the industry average growth rate of 35% in FY25, the company’s Managing Director, JS Gujral, told NDTV Profit after a strong performance in Q3.
Syrma SGS posted a total revenue of Rs 891.5 crore in Q3, a jump of 24% year-on-year from Rs 718.8 crore in the year-ago period. The growth was aided by its auto, industrial and railway businesses, which grew between 37% and 38% each. Net profit soared 161% YoY to Rs 53 crore in Q3FY25 from Rs 20.3 crore in the corresponding quarter of last financial year. The company's Ebitda margin during the quarter under review was 9.1%, while for nine months it was 7.2%.
Talking to NDTV Profit, Gujral said that the company’s strategies have resulted in a better Ebitda margin, which was recorded at 5.9% in Q3 of the last fiscal.
“When we entered this year, it was in the back of some weak quarters in the preceding year. So the first objective of the management was to consolidate and come back on track in terms of Ebitda margin numbers. Revenue was there. The steps that the company's management has taken have started yielding results,” he said.
The top executive highlighted that a 7% Ebitda margin in FY25 was achievable for Syrma SGS Technology.
“This quarter, we have had a 9.1% Ebitda margin, and cumulatively for nine months, it's 7.2%. We guided for 7%. I believe that 7% is now achievable. I would still stick to 7% and not revise it upwards. That we will do once the year ends or in another about 60 days,” he said.
He maintained that the revenues of the company will be at an industry-plus average, while margins will be 7%.
“Currently, we maintain that we will grow at industry plus average and 7% of margins and are very confident of achieving that,” Gujral said
The Syrma SGS MD mentioned that, although margins could exceed the guided figures, the company preferred to adopt a conservative approach.
“Logically, margins should be 7.2. Upwards of 7.2 in the coming quarter. But, for a conservative approach, we are guiding for an annual margin of 7%. If it is better than that, then we will share. Logically, it should be better than that,” he said.
“We will endeavour, but 9% is a tough call to be very honest. I would be happy to have it north of 7% and then inching up on a long-term, sustained basis,” Gujral added.
Talking about the revenue growth of the company, the top executive explained that the industry average is around 35%.
“The industry average would be about 30-35%. Consumer (space) could be higher. So we say a 30% or 35% growth with the superior Ebitda margins in the coming year is the endeavour of the management,” he said.
Shares of Syrma SGS Technology were locked in the upper circuit of 20% at Rs 505.10 apiece during NSE’s trade on Wednesday. Meanwhile, benchmark Nifty 50 was up 0.74% at 23,127.85 at 1:02 pm.
