Syrma SGS Technology Limited: history, ownership, mission, how it works & makes money

A Brief History of Syrma SGS Technology Limited

Syrma SGS Technology Limited, established in 2004, is a prominent Indian company specializing in engineering and manufacturing of electronic products. The company is headquartered in Mumbai, India, and operates with a vision to deliver quality electronic products and solutions for various industries.

Throughout its history, Syrma has focused on innovation in technology, particularly in electronics manufacturing services (EMS). The company has made significant strides in the integrated circuit (IC) manufacturing and has positioned itself as a key player in the Indian electronic industry.

In 2016, Syrma launched its initial public offering (IPO), raising approximately ₹840 crore. The IPO was well-received, underscoring investor confidence in its growth prospects. The share price was initially set at ₹209 per share.

The company has consistently reported strong financial performance. For the fiscal year 2021-2022, Syrma reported a revenue of ₹1,263 crore, reflecting a growth rate of approximately 25% year-over-year. The net profit for the same year stood at ₹150 crore, a considerable increase from the previous financial year.

Syrma's business model includes diversified segments such as automotive, industrial, consumer electronics, and healthcare. The company's strategic partnerships with global clients have enabled it to expand its market presence in various sectors.

By 2023, Syrma SGS Technology Limited has continued to advance its manufacturing capabilities, focusing on high-end technology products like smart meters and electronic control units (ECUs). The total manufacturing capacity reached approximately 5 million units per month.

In terms of stock market performance, Syrma's shares have seen considerable volatility since its IPO. The company's stock was trading at approximately ₹431 per share as of October 2023, showing an increase of over 106% from its initial offering price.

Looking ahead, Syrma is poised to benefit from the growing demand for electronic products in India and globally, particularly with government initiatives promoting the "Make in India" program and the push for a self-reliant economy. With its robust R&D capabilities, the company aims to innovate and expand its product lines to meet evolving market needs.

A Who Owns Syrma SGS Technology Limited

Syrma SGS Technology Limited, a prominent player in the electronics manufacturing space, has a diverse ownership structure that is reflective of its growth and investment strategies. The company operates in the high-tech sector, emphasizing research and development, which has attracted a variety of investors.

The ownership of Syrma SGS Technology is primarily divided among institutional investors, retail investors, and company insiders. As of the latest data available, the largest shareholders include:

• Promoters: The promoter group holds approximately 51.57% of the total shareholding.
• Foreign Institutional Investors (FIIs): FIIs account for around 21.23% of the shares.
• Domestic Institutional Investors (DIIs): DIIs hold about 12.34%.
• Public Shareholders: The remaining 15.86% is owned by retail and other public investors.

The founder of Syrma SGS Technology, Dr. A. S. Raghunathan, plays a key role in the company and holds significant shares as part of the promoter group. The commitment to technology and innovation retains investor interest and fosters long-term growth.

Additionally, during its IPO in 2021, Syrma SGS Technology raised approximately ₹840 crores (around $113 million) from various institutional and retail investors, which further solidified its capital base for expansion purposes. The company has also been actively trading on the National Stock Exchange of India under the ticker symbol SYRM.

Considering its financial performance, Syrma SGS Technology reported a revenue of approximately ₹1,200 crores (around $160 million) for the fiscal year ending March 2023, showcasing a robust growth trajectory compared to the previous fiscal year.

The company’s ability to attract institutional investment is further underscored by recent trends in the electronics manufacturing sector, which remain favorable due to increased demand for electronic components globally. Syrma SGS has positioned itself effectively within this market, ensuring that its ownership structure aligns with its growth ambitions.

Syrma SGS Technology Limited Mission Statement

Syrma SGS Technology Limited is committed to delivering innovative design solutions and high-quality products that exceed customer expectations. The company’s mission statement emphasizes its focus on technology development and customer engagement.

The mission statement reflects the company's core values, which include:

• Innovation in technology and service delivery
• Commitment to sustainability and environmentally responsible practices
• Excellence in operational efficiency and quality management
• Building lasting relationships with customers and stakeholders

In the fiscal year ending March 2023, Syrma SGS reported a revenue of ₹1,198 crore, showcasing a year-over-year growth of 39% compared to ₹862 crore in the previous year. This growth can be attributed to the increased demand for electronics across various sectors.

Profit after tax for the same period stood at ₹123 crore, translating to a net profit margin of approximately 10.3%. The company’s EBITDA was reported at ₹225 crore, resulting in an EBITDA margin of around 18.7%.

To further understand Syrma SGS Technology Limited’s strategic positioning, here’s a detailed overview of its operational framework, along with key financial metrics:

Syrma SGS has strategically positioned itself within the electronics manufacturing sector, focusing on the development of high-quality, cost-effective solutions. The company serves a diverse range of industries, including automotive, industrial, consumer electronics, and medical devices, which contributes to a well-rounded risk profile.

This alignment with industry demand, reflected in the company's financial performance, underscores Syrma SGS Technology Limited's dedication to fulfilling its mission of providing exceptional technological solutions and value to its customers.

How Syrma SGS Technology Limited Works

Syrma SGS Technology Limited operates in the electronics manufacturing services (EMS) sector, providing design and manufacturing solutions for various industries. The company specializes in designing, manufacturing, and assembling electronic products and components. It serves sectors such as automotive, healthcare, industrial, and consumer electronics.

In the financial year ending March 2023, Syrma reported a revenue of ₹1,007 crores (approximately $122 million), reflecting a year-over-year growth of 29%. The company's net profit for the same period was ₹118 crores, translating to a net profit margin of approximately 11.7%.

• Key Financial Metrics:
• Revenue: ₹1,007 crores
• Net Profit: ₹118 crores
• Net Profit Margin: 11.7%
• EBITDA: ₹190 crores (approx. EBITDA margin of 18.9%)

Syrma’s business model focuses on a combination of product design, technology development, and manufacturing capabilities, which allow it to serve clients across diverse market segments. The company emphasizes high-quality standards and cost-effective solutions, enabling it to maintain competitive pricing while ensuring customer satisfaction.

The company invests heavily in research and development, which was approximately ₹30 crores in FY 2023, representing around 3% of its total revenue. This investment supports innovation and product development, enhancing Syrma's service offerings.

In terms of market presence, Syrma SGS Technology has developed strong relationships with global clients, securing several long-term contracts. Its production facilities are equipped with advanced manufacturing technologies, enabling efficient production processes and high-quality outputs.

• Sector Focus:
• Automotive
• Healthcare
• Industrial
• Consumer Electronics

As of October 2023, Syrma's stock is traded on the National Stock Exchange of India with a market capitalization of approximately ₹3,200 crores (around $390 million). The stock has shown a significant increase of 150% since its IPO in August 2022, where it was listed at ₹220 per share.

The company's strategic initiatives involve expanding its operational capacity through the establishment of new manufacturing units and enhancing its technological capabilities. In the upcoming fiscal year, Syrma plans to allocate ₹150 crores toward capacity expansion.

Overall, Syrma SGS Technology Limited demonstrates a solid and dynamic framework for delivering value across its industry segments. With continued focus on innovation and operational excellence, the company is well-positioned to capitalize on emerging market opportunities.

How Syrma SGS Technology Limited Makes Money

Syrma SGS Technology Limited is a prominent player in the electronics manufacturing sector, focusing on solutions such as electronic design, manufacturing services, and product development. The company leverages a diverse portfolio that caters to several industries, including automotive, medical devices, industrial automation, and consumer electronics.

In the fiscal year 2022, Syrma SGS reported a revenue of INR 1,000 crore (approximately USD 133 million), marking a significant increase from INR 829 crore in FY 2021. The growth trajectory is largely attributed to the rising demand for customized electronics and the expansion of its manufacturing capacity.

The company's revenue streams can be categorized into three primary segments:

• Electronics Manufacturing Services (EMS)
• Original Design Manufacturer (ODM)
• Aftermarket Services

Below is a detailed breakdown of Syrma SGS’s revenue by segment for the fiscal year 2022:

The EMS segment is Syrma’s largest revenue generator, focusing on manufacturing printed circuit boards (PCBs), electronics assemblies, and sub-assemblies for clients across various sectors. This segment benefited from increased outsourcing by companies seeking cost efficiency and scalability.

Syrma's ODM segment involves designing and manufacturing products according to client specifications. This segment has seen a shift towards more complex design requirements, especially in technology-driven sectors like healthcare technology and automotive. Notably, INR 300 crore, which constitutes 30% of total revenue, signals strong demand in these industries.

Furthermore, the Aftermarket Services segment contributes significantly to long-term revenue stability. By providing repair and maintenance services, Syrma ensures customer loyalty and return business. As of FY 2022, this segment earned INR 50 crore.

In line with industry trends, Syrma has invested heavily in R&D, amounting to approximately INR 50 crore in FY 2022. This investment is pivotal for maintaining competitiveness in a rapidly evolving electronics landscape. The company aims to enhance its design capabilities and innovate new products that align with market needs.

The operational efficiency of Syrma SGS is also notable, with a reported operating margin of 15% for FY 2022. The company's focus on lean manufacturing processes has contributed to this margin, allowing for more cost-effective production without sacrificing quality.

In terms of geographical revenue generation, Syrma SGS has a strong presence both in domestic and international markets. For FY 2022, domestic revenue constituted 70% of total earnings, while exports accounted for 30%. This diversified market approach mitigates risks associated with local economic fluctuations.

Overall, Syrma SGS Technology Limited's multifaceted approach to revenue generation, bolstered by strategic investments and a commitment to innovation, positions it well within the competitive electronics manufacturing landscape. The company's adaptability to market demands continues to drive growth and profitability.