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Syrma SGS reports best-ever quarter; Q2 revenue up 73% to Rs 1,999.5 crore

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In short

Growth during the quarter was largely underpinned by exports, which accounted for more than a quarter of total operating revenue. Alongside the top-line expansion, the company improved its working capital cycle to 63 days and generated solid operating cash flow throughout the first half of the year. To support future demand, the firm is deploying capital into strategic manufacturing ventures with Japanese and South Korean partners, including a major circuit board facility in Andhra Pradesh.

Key points

  • Efficient execution and an improved working capital cycle of 63 days helped overcome indu…: Efficient execution and an improved working capital cycle of 63 days helped overcome industry component shortages.
  • International partnerships with Kaga Electronics and Shinhyup Electronics are driving maj…: International partnerships with Kaga Electronics and Shinhyup Electronics are driving major capital investments in advanced manufacturing.
  • Company shares closed 2.85% lower at Rs 1,620.90 on the BSE ahead of the earnings release.: Company shares closed 2.85% lower at Rs 1,620.90 on the BSE ahead of the earnings release.

Sources checked by our analysis pipeline: 1

Consolidated revenue rose 73.2% to Rs 1,999.5 crore from Rs 1,154.6 crore a year earlier, marking the company's highest-ever quarterly revenue, it said. EBITDA increased 63.9% to Rs 203.1 crore, although operating margins moderated to 10.2% from 10.7%.

Sequentially, revenue increased 24.7% from Rs 1,603.7 crore in the June quarter, while net profit rose 17.5% from Rs 105.7 crore.

Exports, which accounted for 26% of operating revenue, grew 91% year-on-year during the quarter.

Jasbir Singh Gujral, Managing Director, said the company maintained customer commitments despite industry-wide component constraints, reduced working capital to 63 days and generated strong positive operating cash flow during the first half.

In June, Syrma said it plans to invest Rs 25 crore jointly with Japanese partner Kaga Electronics this fiscal year to strengthen its domestic supply ecosystem.

Last September, Syrma announced plans to invest Rs 1,595 crore in Andhra Pradesh to build “India’s largest multi-layer printed circuit board (PCB) manufacturing facility”. The state government allotted 26.7 acres to the company with a 75% subsidy on land costs under its Electronics Components Manufacturing Policy.

Syrma is developing…

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