Syrma SGS FY26: 30-35% Revenue Growth, 8% Margin

Syrma SGS Technology Ltd has reiterated its FY26 revenue growth guidance of 30% to 35% while pushing for a better margin mix by reducing exposure to its low-margin consumer business. Managing Director Jasbir S. Gujral said the company is recalibrating towards higher-margin verticals such as industrial, healthcare and automotive, even as export customers navigate uncertainty around possible US tariff actions.

Management commentary also pointed to improving profitability indicators over a two-year lens, including a rise in gross material margin and higher growth in operating metrics relative to revenue. Alongside the strategy shift, Syrma SGS has highlighted new customer additions, export momentum, and capacity headroom in recently commissioned facilities.

Gross material margin improves as mix changes

Management said gross material margin increased from 15% to 24%, signalling a richer product mix and improved sourcing. Over a two-year period, the company indicated revenue growth of 25%, EBITDA growth of 50%, PBT growth of 27% and PAT growth of 32%.

The sharper growth in EBITDA relative to revenue was linked to a deliberate move away from low-margin, high-volume consumer manufacturing towards segments where engineering and complexity support better margins.

Exports rise quarter-on-quarter despite tariff uncertainty

Exports for the quarter increased from 180 in Q1 FY25 to 232 in Q1 FY26, a 29% increase, according to management. The company said this growth came despite uncertainty around tariffs being discussed by the US government.

Management said exports are largely to Western Europe and the US, and flagged that tariff uncertainty can delay the release of larger purchase orders. The expectation shared in the discussion was that customers could turn more aggressive on sourcing once there is policy clarity.

Consumer share falls as Syrma targets a 30% mix

The company said its consumer vertical, described as a low-margin business, has shown a planned decline from 53% to 34% of revenue. Gujral reiterated an earlier stated goal to reduce the consumer vertical to about 30% of total revenue on an annualised basis.

He also clarified the consumer bucket includes both low-margin, high-volume work and ODM, which is characterised as high-margin and low-volume. The stated focus is to bring down the low-margin, high-volume portion within this bucket, even if ODM expands.

Margin profile by segment, as described by management

In the NDTV Profit interaction, management said healthcare and industrial segments yield 10% to 15% margins compared with the consumer segment’s 4% to 6%. Syrma SGS also stated it aims to achieve an Ebitda margin of 8% by lowering the consumer contribution.

The managing director dismissed concerns about margin erosion in the industrial segment, citing a low-to-medium volume, high-complexity nature of products and improved sourcing capabilities.

FY26 growth guidance and what it implies for quarterly execution

Management reiterated its FY26 revenue growth guidance of 30% to 35%. In a separate discussion around execution, the company outlined an annual revenue target range of about ₹4,800 crore to ₹5,000 crore for the full year.

Based on the numbers shared, management said it had done about ₹900 crore so far and would need to deliver approximately ₹3,900 crore to ₹4,100 crore in the remaining three quarters. That translates to roughly ₹1,300 crore per quarter on an average basis, while also noting that seasonality typically skews heavier towards the second half.

Smart metering contribution and annual expectation

On smart metering, management said Q1 revenue was approximately ₹55 crore to ₹60 crore. For the full year, the company indicated an expectation of about ₹250 crore to ₹300 crore from smart metering.

The commentary also touched on working capital dynamics in the segment in another update note, with the company stating it is being selective with customers so sales translate into positive cash flow.

Capacity, capex and utilisation commentary

A question on capacity and FY27 growth prompted management to say that some plants are running at less than 50% utilisation, while new plants are operating at less than 50% and even 40% capacity. With capex stated as less than ₹100 crore for the year, Syrma SGS indicated it expects to meet FY26 revenue targets and support next year’s growth with only marginal investments as plants mature and volumes ramp.

Laptops, PLI visibility, and OSAT caution

Syrma SGS has started assembling high-end laptops for Taiwanese firm MSI, targeting domestic demand. Gujral said backward integration such as manufacturing motherboards and other components could commence in FY26, depending on eligibility clarity for the Production Linked Incentive scheme over the next quarter or four to five months.

On semiconductors, management said it remains cautious about entering the OSAT market and would only pursue it with a credible global technology partner. It described OSAT as a thin-margin business requiring deep pockets and said any revenue from this segment is at least one to two years away.

FY25 results, exports target, and fundraise plan

As reported by PTI, Syrma SGS posted an 87% jump in consolidated net profit to ₹65.4 crore in the March quarter of FY25, even as revenue from operations fell 18.4%. For FY25, profit rose 58.2% to ₹169.8 crore, while revenue increased 20% year-on-year to ₹3,786.6 crore.

The company said it onboarded 25 new customers in FY25 and expects export momentum to build in FY26. Syrma SGS is looking to cross ₹1,000 crore in export value in FY26, up from ₹860 crore in FY25.

The board has approved raising funds via QIP for an aggregate amount not exceeding ₹1,000 crore. Management said organic operations do not require additional funding given near-zero debt and that proceeds are positioned for potential acquisitions and component manufacturing opportunities under PLI, with applications referenced ahead of a July 31 deadline.

Key figures mentioned by the company and reports

Why the strategy shift matters for investors

The company’s own framing is that consumer manufacturing delivers thin Ebitda margins, while healthcare and industrial work supports materially higher profitability. If Syrma SGS sustains the consumer mix reduction while scaling exports and higher-complexity programs, the main observable outcome should be a margin profile that grows faster than revenue, as reflected in the two-year EBITDA growth figure cited by management.

Near-term, the company has tied a meaningful part of its confidence to order book visibility and discussions with customers. Management also indicated that verticals like MedTech can be rear-loaded, suggesting that quarter-to-quarter comparisons may not fully capture the yearly trajectory.

What to watch next

Investors will track whether Syrma SGS sustains export growth amid tariff-related uncertainty and whether the consumer share moves closer to the 30% target by the end of FY26. Other key milestones include updates on PLI eligibility for laptop component manufacturing, progress in smart metering revenues versus the ₹250 crore to ₹300 crore expectation, and clarity on how any QIP proceeds are deployed for acquisitions or component opportunities.