Syrma SGS Technology Ltd., a prominent player in the electronic system design and manufacturing landscape, has set its sights on achieving a remarkable milestone – $1 billion in revenue by FY27. This ambitious target is accompanied by a strategic exploration of opportunities in the burgeoning semiconductor and printed circuit board (PCB) manufacturing sectors. Jasbir Singh Gujral, the company’s managing director, shared these insights in an exclusive interview.
Syrma’s commitment to growth is evident in its projected revenue increase of 35-40% year-on-year. The company anticipates a revenue of approximately ₹4,500 crore in the upcoming fiscal year, followed by ₹6,000 crore the year after, ultimately reaching the coveted $1 billion mark by FY27 or FY28.
While the company has reported a strong financial performance, with revenue of ₹833 crore in the quarter ended September, it’s worth noting that profit for the period came in lower than anticipated at ₹39.6 crore. However, Gujral remains optimistic about the company’s prospects, highlighting its robust EBITDA margin of 7%. Syrma’s shares traded at ₹486.5 on the BSE on Tuesday, reflecting a 12.7% increase from the previous day.
Syrma’s revenue portfolio is strategically diversified, encompassing both high-volume segments like consumer and IT, as well as low-volume, high-margin segments such as healthcare, industrial, and RFIDs. This balanced approach allows the company to navigate market fluctuations effectively.
The company’s foray into the semiconductor and PCB manufacturing sectors is a calculated move, marked by careful consideration of the complex landscape. Gujral emphasized the importance of partnering with credible original design manufacturers (ODMs) or joint venture partners. He noted, “We are evaluating it, but we are very conscious of what it involves. Just because the government or the government plus the state government is giving us 75% subsidy, we don’t want to jump into it. And the critical – and the very critical part we hear – is credibility of the ODM (original design manufacturer) or joint venture partner.”
Syrma’s commitment to export growth is evident in its target of generating one-third of its revenue from international markets. The company expects export revenue to reach ₹1,100 crore in FY25, fueled by a strategic marketing push in the US market and scaled-up manufacturing operations in Germany.
The company’s recent establishment of a 26.5-acre campus in Pune, boasting 1.2 million square feet of manufacturing space at peak capacity for PCBA, signifies its commitment to expanding its manufacturing footprint. This new facility will primarily cater to clients in South India, allowing the company to free up capacity at its North Indian plants to accommodate additional orders.
Syrma’s exploration of backward integration into PCB manufacturing underscores its commitment to controlling the supply chain and enhancing its value proposition. While the company has not yet finalized any deals in this area, Gujral confirmed that it is “seriously evaluating” such opportunities.
With 13 manufacturing facilities strategically located across India, from Himachal Pradesh to Karnataka, Syrma has established a strong national presence. The company offers a comprehensive range of services, encompassing manufacturing, engineering, and design, complemented by its ‘Zone of Autonomous Creation’ in Chennai. This innovative initiative provides rapid prototyping services, empowering customers to bring their design concepts to life.
Syrma’s commitment to innovation is further demonstrated by its three dedicated R&D facilities in Chennai, Gurugram, and Stuttgart, Germany. These facilities are key to driving technological advancements and enhancing product capabilities.
In its pursuit of continued growth and expansion, Syrma is open to acquisitions that can either address regulatory hurdles or provide access to new markets. The company has secured an enabling resolution to raise ₹1,000 crore through a qualified institutional placement, which will be strategically deployed for acquisitions.
Syrma SGS Technology’s unwavering commitment to growth, innovation, and strategic partnerships positions it as a force to be reckoned with in the global electronics manufacturing landscape. The company’s ambitious goals, coupled with its commitment to responsible growth, are set to shape its future trajectory and solidify its leadership position in the industry.
