SYRMA - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.8
| Stock Code | SYRMA | Market Cap | 16,396 Cr. | Current Price | 850 ₹ | High / Low | 910 ₹ |
| Stock P/E | 66.4 | Book Value | 145 ₹ | Dividend Yield | 0.18 % | ROCE | 6.34 % |
| ROE | 4.54 % | Face Value | 10.0 ₹ | DMA 50 | 745 ₹ | DMA 200 | 704 ₹ |
| Chg in FII Hold | -0.55 % | Chg in DII Hold | -0.49 % | PAT Qtr | 95.4 Cr. | PAT Prev Qtr | 65.4 Cr. |
| RSI | 73.4 | MACD | 17.0 | Volume | 25,40,765 | Avg Vol 1Wk | 44,94,817 |
| Low price | 355 ₹ | High price | 910 ₹ | PEG Ratio | 2.22 | Debt to equity | 0.10 |
| 52w Index | 89.2 % | Qtr Profit Var | 83.3 % | EPS | 13.1 ₹ | Industry PE | 29.4 |
📊 Analysis: SYRMA shows weak long-term fundamentals with ROE at 4.54% and ROCE at 6.34%, both below compounding benchmarks. The stock trades at a high P/E of 66.4 compared to the industry average of 29.4, suggesting overvaluation. PEG ratio of 2.22 indicates growth is priced at a premium. Dividend yield of 0.18% is negligible. Technicals show strong momentum with RSI at 73.4 (overbought zone) and MACD positive, but valuations remain stretched. The ideal entry zone lies between 700–750 ₹ for margin of safety. For existing holders, consider a medium-term horizon with partial exit near 900–910 ₹ resistance unless profitability improves significantly.
✅ Positive
- Market cap of 16,396 Cr. provides scale in the electronics manufacturing space.
- Debt-to-equity ratio of 0.10 indicates low leverage.
- Quarterly PAT growth (95.4 Cr. vs 65.4 Cr.) shows strong earnings momentum.
- EPS of 13.1 ₹ provides valuation support.
⚠️ Limitation
- Low ROE (4.54%) and ROCE (6.34%) limit long-term compounding potential.
- High P/E (66.4) compared to industry average (29.4).
- PEG ratio of 2.22 highlights expensive growth valuation.
- Dividend yield of 0.18% is negligible.
- Both FII (-0.55%) and DII (-0.49%) holdings declined, showing reduced institutional confidence.
📉 Company Negative News
- Stock trading near 52-week high (89.2% of range), limiting upside potential.
- Overbought technical indicators (RSI 73.4) suggest short-term correction risk.
📈 Company Positive News
- Quarterly profit variation (+83.3%) shows strong operational improvement.
- Low debt levels enhance financial stability.
- Strong trading volumes reflect investor interest.
🏭 Industry
- Electronics manufacturing sector benefits from rising demand in consumer and industrial applications.
- Industry P/E at 29.4 suggests SYRMA trades at a steep premium.
- Structural drivers: digital adoption, IoT, and semiconductor demand.
🔎 Conclusion
SYRMA earns a rating of 2.8 due to weak ROE/ROCE and expensive valuations despite strong profit growth. Long-term investors should only consider entry in the 700–750 ₹ zone for margin of safety. Current holders may adopt a medium-term horizon, with partial profit booking near 900–910 ₹ resistance unless return ratios improve. The stock remains a growth-oriented play but requires caution due to valuation risks and low efficiency metrics.