 "This smallcap stock zooms 20% after Q3 profit jumps 161% annually")
Shares of Syrma SGS Technology locked in upper circuit of 20 per cent at Rs 504.35 on the BSE in Wednesday’s intra-day trade amid heavy volumes after the company reported a 161 per cent year-on-year (YoY) jump in consolidated profit after tax (PAT) at Rs 53 crore in December 2024 (Q3FY25) quarter. It had posted PAT of Rs 20.3 crore in the year-ago quarter.
The average trading volumes on the counter rose over three-fold, with a combined 9.62 million equity shares changing hands on the NSE and BSE till 10:58 AM. There were pending buy orders for 270,000 shares on both the NSE and the BSE. The stock price of the smallcap company had hit a record high of Rs 646.50 on January 6, 2025.
The company’s consolidated earnings before interest, tax, depreciation and amortisation (Ebitda) was up by 96 per cent YoY, at Rs 101.3 crore, against Rs 51.6 crore for the corresponding period of the previous year. Its ebitda margin improved to 11.36 per cent from 7.18 per cent.
The company reported a consolidated total revenue of Rs 891.5 crore, up by 24 per cent YoY, as compared to Rs 718.80 crore in the year-ago quarter, primarily driven by the auto and industrials segments.
Syrma SGS is a leading Indian Electronic Systems Design and Manufacturing company. The company's management said EMS continues to witness strong traction across industry verticals. The company remains confident and aspires to grow in line with industry growth rates.
The company offers a comprehensive range of services, including Product Design, Assembly (PCBA & Box Build), Quick Prototyping, and Tester Development Services. In addition to EMS, Syrma SGS also provides OEM solutions for RFID tags and inlays, high-frequency magnetic components, and electro-mechanicals.
Syrma SGS has a strong clientele with the presence of several reputed and marquee domestic and international customers such as TVS Motor Company Limited, A.O. Smith India Water Products Pvt. Ltd., and Robert Bosch Engineering and Business Solution Pvt Ltd. The company reported mixed results. It had guided for revenue growth of 40 per cent to 45 per cent and margins at 7 per cent for FY25. With the current quarter results, the revenue guidance seems to be falling behind, however the company’s ebitda margins are turning out to be slightly better than estimates, ICICI Securities said in a note. India Ratings and Research (Ind-Ra) believes a strong demand for the company’s products, favourable regulatory policies for expansion of such businesses/industry in India through various schemes such as Production-Linked Incentive Scheme and increased focus from global original equipment manufacturers to shift production and manufacturing to India will continue to support revenue growth in the short-to-medium term.