Syrma SGS Technologies targets $1 billion revenue by FY27; evaluates opportunities in semiconductors and PCBs

Syrma, which specialises in printed circuit board assembly and the telecom equipment supply chain, is aiming for a third of its revenue to come from exports. Photo: Courtesy Syrma SGS Technology website
Syrma, which specialises in printed circuit board assembly and the telecom equipment supply chain, is aiming for a third of its revenue to come from exports. Photo: Courtesy Syrma SGS Technology website

Summary

  • Syrma SGS Technologies is 'seriously evaluating' new business opportunities in semiconductors and printed circuit board manufacturing, MD Jasbir Singh Gujral said in an exclusive interaction with Mint.

Syrma SGS Technology Ltd, an electronic system design and manufacturing company, aims to clock $1 billion in revenue by FY27 and is 'seriously evaluating’ opportunities in manufacturing semiconductors and printed circuit boards, managing director Jasbir Singh Gujral said in an exclusive interview with Mint.

Having reported revenue of 833 crore and a profit of 39.6 crore in the quarter ended September, Gujral maintained that the company’s revenue will grow at 35-40% with an EBITDA margin of 7%.

The company’s shares traded at 486.5 on the BSE on Tuesday, up 12.7% from the previous day.

“I expect to do about 4,500 crore next year. We’re growing at 35-40%. By that logic, it could be 6,000 crore the year after and by FY27 or FY28, it could reach $1 billion (over 8,400 crore)," Gujral said.

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The company has a presence in high-volume segments like consumer and IT and in low-volume, high-margin segments such as healthcare, industrial and RFIDs, which balances its revenue portfolio.

Asked about new business opportunities, including semiconductors, Gujral said, “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."

Export target

Syrma, which specialises in printed circuit board assembly (PCBA) and the telecom equipment supply chain, is aiming for a third of its revenue to come from exports, while business at home rises on the back of a push for local manufacturing and local supply.

Revenue from exports is likely to reach 1,100 crore in FY25 and is expected to grow by 15-20% on-year on the back of a greater marketing presence in the US market and increased scale of manufacturing in Germany, Gujral added.

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The company set up a 26.5-acre campus in Pune, which will have 1.2 million square feet of manufacturing space at peak capacity for PCBA, mainly to cater to clients in south India and free up capacity in the north Indian plants, which can be used to cater to additional orders.

Asked whether the company would look at backward integration into PCB manufacturing, Gujral said, “We are seriously evaluating, but we have as yet not closed the deal on PCB."

The company operates 18 manufacturing facilities across Himachal Pradesh, Haryana, Uttar Pradesh, Tamil Nadu and Karnataka. In addition to manufacturing, engineering and design service offerings, the company introduced a ‘Zone of Autonomous Creation’ in Chennai in 2018 to provide quick prototyping services, wherein a design concept is provided by customers, and the company helps create an early form of the final product. The company has three dedicated R&D facilities at Chennai, Gurugram and Stuttgart in Germany.

Syrma is open to acquisitions that can either help it overcome regulatory hurdles or give access to new markets. It has an enabling resolution to raise 1,000 crore through qualified institutional placement, which will be utilised for acquisitions, Gujral added.

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