SYRMA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.4

📊 Core Financials Analysis

Profitability

ROE: 4.54% and ROCE: 6.34% are modest, suggesting underutilization of capital.

EPS of ₹5.83 and a P/E of 148 indicate the stock is significantly overvalued relative to earnings.

PAT declined from ₹32.2 Cr to ₹26.8 Cr QoQ, despite a reported 880% YoY profit variation—likely due to a low base effect.

Balance Sheet Strength

Debt-to-equity ratio: 0.36 — moderate and manageable for a manufacturing firm.

Book Value of ₹84.1 vs Current Price ₹812 → P/B ratio ~9.65, reflecting aggressive pricing.

Dividend Yield of 0.18% — minimal, consistent with a growth-oriented strategy.

Cash Flow & Stability

PEG ratio of 4.95 suggests significant overvaluation relative to growth.

RSI at 58.0 and MACD positive indicate mild bullish momentum, supported by strong DII accumulation (+8.90%).

📉 Valuation Metrics

Metric Value Insight

P/E Ratio 148 Extremely overvalued vs industry PE of 37.5

P/B Ratio ~9.65 Premium pricing

PEG Ratio 4.95 Indicates stretched valuation

Intrinsic Value ~₹650–₹680 Estimated below current price

According to TopStockResearch, Syrma is currently unable to generate sufficient free cash to support its business, despite its revenue growth.

🏭 Business Model & Competitive Edge

Sector: Syrma SGS Technology Ltd operates in the Electronics Manufacturing Services (EMS) space, offering design-led manufacturing across mobility, healthcare, consumer, and industrial verticals.

Strengths

Revenue grew from ₹879 Cr to ₹2,092 Cr between FY20 and FY23, a CAGR of 33.5%

1

Diversified product portfolio and turnkey solutions

Rising domestic demand and export competitiveness in EMS

Challenges

Declining profit margins and high operating expenses

1

High valuation multiples not backed by consistent earnings

Analyst sentiment has deteriorated recently, with downward revisions in sales expectations

2

Despite its strategic positioning in a high-growth sector, Syrma’s margins and earnings growth have not kept pace with its valuation.

📌 Entry Zone Recommendation

Suggested Entry Range: ₹650–₹680

Below 50 DMA (₹738) and closer to intrinsic value

RSI and MACD suggest waiting for technical confirmation before entry

🧭 Long-Term Holding Guidance

Hold if Already Invested: Sector tailwinds and institutional interest support long-term potential.

Accumulate on Dips: Especially near ₹650 for better margin of safety.

Watchlist Triggers

Margin recovery and EPS acceleration

New contract wins or export growth

Institutional accumulation and volume breakout

Syrma SGS is a promising EMS player riding India’s electronics boom, but its current valuation demands caution. You can explore more on TradeBrains’ deep dive for further insights.

1

tradebrains.in

2

www.marketscreener.com

Edit in a page