SYRMA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.5
| Stock Code | SYRMA | Market Cap | 14,794 Cr. | Current Price | 767 ₹ | High / Low | 910 ₹ |
| Stock P/E | 60.0 | Book Value | 145 ₹ | Dividend Yield | 0.20 % | ROCE | 6.34 % |
| ROE | 4.54 % | Face Value | 10.0 ₹ | DMA 50 | 736 ₹ | DMA 200 | 701 ₹ |
| Chg in FII Hold | -0.55 % | Chg in DII Hold | -0.49 % | PAT Qtr | 95.4 Cr. | PAT Prev Qtr | 65.4 Cr. |
| RSI | 61.7 | MACD | -3.72 | Volume | 34,34,128 | Avg Vol 1Wk | 39,71,055 |
| Low price | 355 ₹ | High price | 910 ₹ | PEG Ratio | 2.01 | Debt to equity | 0.10 |
| 52w Index | 74.3 % | Qtr Profit Var | 83.3 % | EPS | 13.1 ₹ | Industry PE | 29.2 |
💰 Financials: Syrma SGS Technology (SYRMA) shows moderate fundamentals with ROE at 4.54% and ROCE at 6.34%, reflecting limited efficiency in capital usage. Debt-to-equity ratio of 0.10 highlights a conservative balance sheet with minimal leverage. Quarterly PAT improved to ₹95.4 Cr. from ₹65.4 Cr., showing strong sequential growth (+83.3%). Cash flows are supported by rising demand in electronics manufacturing services, though margins remain thin.
📊 Valuation: Current P/E of 60.0 is significantly above the industry average of 29.2, suggesting stretched valuation. P/B ratio (~5.3) is high relative to book value of ₹145. PEG ratio of 2.01 indicates moderate overvaluation compared to growth prospects. Intrinsic value analysis suggests the stock is trading at a premium, requiring caution for new entries.
⚙️ Business Model & Competitive Advantage: Syrma operates in electronics manufacturing services (EMS), focusing on automotive, healthcare, and industrial electronics. Its competitive advantage lies in diversified product offerings, strong client relationships, and exposure to high-growth sectors. However, profitability is constrained by high competition and thin margins typical of EMS businesses.
📈 Entry Zone: Considering DMA 50 (₹736) and DMA 200 (₹701), accumulation is attractive in the ₹720–₹740 range. Long-term investors should hold cautiously, as valuations are stretched despite strong revenue growth potential.
Positive
- Sequential PAT growth (+83.3%) indicates strong momentum.
- Low debt-to-equity ratio (0.10) ensures financial stability.
- Diversified product portfolio across automotive, healthcare, and industrial electronics.
- Exposure to high-growth EMS sector.
Limitation
- Low ROE (4.54%) and ROCE (6.34%) reflect weak efficiency.
- High P/E (60.0) compared to industry average (29.2).
- P/B ratio (~5.3) suggests expensive valuation.
- PEG ratio of 2.01 signals moderate overvaluation relative to growth.
Company Negative News
- Decline in FII holdings (-0.55%).
- Decline in DII holdings (-0.49%).
Company Positive News
- Strong quarterly profit growth from ₹65.4 Cr. to ₹95.4 Cr.
- Stock trading near 52-week high range, reflecting investor optimism.
Industry
- EMS industry P/E at 29.2 indicates Syrma trades at a premium.
- Sector growth driven by rising demand in automotive, healthcare, and industrial electronics.
- Thin margins and high competition remain key risks.
Conclusion
🔑 Syrma SGS Technology is a growth-oriented EMS company with strong sequential profit momentum and low debt. However, weak return ratios and stretched valuations limit near-term attractiveness. Entry around ₹720–₹740 offers a better risk-reward balance. Long-term holding is justified for investors seeking exposure to India’s electronics manufacturing growth story, but caution is advised due to premium pricing and margin pressures.
I can also prepare a comparative HTML snapshot against peers like Dixon Technologies and Amber Enterprises to highlight Syrma’s relative valuation and efficiency.