Syrma SGS Technology Q2 Revenue Rises 73%, Margins Narrow

Syrma SGS Technology reported record Q2 FY27 total revenue of ₹1,999.5 crore, up 73.2% year-on-year, and profit after tax of ₹124.2 crore, up 87.2%. The earnings growth came alongside a sharp gross-margin decline to 21.1% from 24.5% in Q1 FY27, as material consumption grew faster than revenue.

How did Syrma SGS perform in Q2 FY27?

Syrma SGS delivered its highest quarterly revenue, EBITDA, profit before tax and profit after tax in the September quarter of FY27. Total revenue rose 24.7% sequentially from ₹1,603.7 crore in Q1 FY27, while revenue from operations, excluding other income, reached ₹1,989.7 crore.

Profit after tax increased to ₹124.2 crore from ₹66.3 crore a year earlier and ₹105.7 crore in the preceding quarter. Profit before tax rose 84.6% year-on-year to ₹165.2 crore. The reported PAT margin was 6.2%, higher than the year-ago level but lower than 6.6% in Q1 FY27.

Why did Syrma SGS gross margin decline?

Syrma SGS's gross margin declined because material consumption rose faster than total revenue. Cost of materials consumed increased 79.9% year-on-year to ₹1,570.3 crore, compared with the 73.2% growth in total revenue.

Gross profit still grew 53.7% year-on-year to ₹419.3 crore, but that pace trailed sales growth. Consequently, gross margin narrowed to 21.1% from 23.8% in Q2 FY26 and 24.5% in Q1 FY27, a sequential contraction of about 340 basis points. The company also reported 1.7% margin compression in the first half of FY27 due to mix changes and material-cost pressure.

What happened to Syrma SGS EBITDA margin?

Syrma SGS reported an EBITDA margin of 10.2% in Q2 FY27, down from 10.7% a year earlier and 11.0% in Q1 FY27. EBITDA rose 63.9% year-on-year to ₹203.1 crore from ₹124 crore, but the rate of EBITDA growth was below the rise in revenue.

EBITDA excluding other income was ₹193.3 crore, translating into a margin of 9.7%. This compared with ₹115.2 crore in Q2 FY26 and ₹161.6 crore in Q1 FY27. The reported 10.2% EBITDA margin was below the previously communicated full-year guidance range of 10.5% to 11%, putting the margin trajectory in focus despite the rise in absolute operating profit.

What supported Syrma SGS revenue growth?

Syrma SGS said growth was broad-based across all five reported industries, with automotive, industrial and export businesses among the contributors cited in the market discussion. Export revenue increased 91%, supporting the company's strong top-line expansion during the quarter.

The revenue performance also lifted first-half figures above the prior full-year levels cited in the context. Revenue for the first half of FY27 stood at ₹3,603 crore, while profit after tax was ₹230 crore. However, the quarterly results also showed that rapid expansion in revenue does not automatically translate into stable margins when product mix and input costs move unfavourably.

Conclusion

Syrma SGS combined rapid sales growth with faster profit growth in Q2 FY27, setting quarterly records across key reported profit measures. Yet the 21.1% gross margin and 10.2% reported EBITDA margin show that higher material consumption and mix changes reduced the operating leverage that investors may expect from revenue growth.

The key item to watch is whether Syrma SGS can move EBITDA margin back toward its 10.5% to 11% full-year guidance range. Future quarterly disclosures on material costs, revenue mix, export growth and working-capital changes will indicate whether the margin pressure is easing or continuing.