SYRMA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 3.6

🔧 Syrma SGS Technology Ltd (SYRMA) shows strong institutional interest and sector alignment, but elevated valuation and modest return metrics suggest a cautious accumulation strategy.

📈 Positive

• 📈 Institutional Confidence: DII holdings surged by 7.23% and FII by 0.68%, indicating strong investor interest.
• 📊 EPS Growth: ₹5.83 with a quarterly profit jump of 880% signals operational turnaround.
• 📉 Moderate Leverage: Debt-to-equity ratio of 0.36 supports financial flexibility.
• 📈 Technical Support: Trading above 50 DMA and 200 DMA with RSI at 55.2 suggests stable momentum.
• 🔌 Business Model: Diversified electronics manufacturing services (EMS) with exposure to automotive, industrial, and consumer segments.

⚠️ Limitation

• 💰 Elevated Valuation: P/E of 149 is significantly above the industry average of 35.8.
• 📉 High PEG Ratio: 4.97 suggests growth may not justify the premium.
• 📉 Modest Returns: ROCE of 6.34% and ROE of 4.54% indicate average capital efficiency.
• 📉 Profit Decline: PAT fell from ₹32.2 Cr. to ₹26.8 Cr. sequentially.
• 📉 Volume Drop: Current volume significantly below weekly average, indicating reduced market activity.

📉 Company Negative News

• Stock trading near 52-week high with valuation concerns.
• Sequential profit decline despite strong YoY growth.

📈 Company Positive News

• Strong institutional accumulation and sector tailwinds in electronics manufacturing.
• Expansion into high-margin segments like IoT and automotive electronics.
• Positive long-term outlook driven by government PLI schemes and export potential.

🏭 Industry

• EMS sector benefits from rising demand for electronics, localization, and global supply chain diversification.
• Industry P/E of 35.8 reflects moderate valuation norms.
• Peers include Dixon Technologies, Amber Enterprises, and Kaynes Technology.

🧾 Conclusion

• 📉 Entry Zone: ₹770–₹800 could be a favorable accumulation range based on DMA and RSI levels.
• 📈 Long-Term View: Hold for 3–5 years; strong fundamentals and sector growth support sustained performance.
• 🔍 Valuation Watch: Consider phased entry or wait for earnings consistency to justify premium pricing.