Syrma SGS shares hit record high on strong Q2 earnings

Syrma SGS Technology stock hit its record high of Rs 909 today, following the company's announcement of strong second quarter financial results and fresh expansion into the defence electronics sector.

In Q2 FY26, Syrma SGS Technology reported a consolidated net profit of Rs 64.1 crore, marking a 77% increase year-on-year. Revenue for the period rose by 38% to Rs 1,146 crore. Earnings before interest, tax, depreciation, and amortisation (EBITDA) climbed by 56% to Rs 115 crore, with margins improving to 10.06%. The company has continued to see steady growth across automotive, industrial, and consumer verticals, with consumer share moderating to 32%. Revenue visibility remains healthy, supported by an estimated order book of Rs 5,800 crore, largely driven by automotive and industrial manufacturing.

A significant step in the company's growth strategy came with the acquisition of a 60% stake in Elcome Integrated Systems for approximately Rs 235 crore. This move was paired with Elcome's acquisition of Navicom Technology International, now a wholly-owned subsidiary. Both entities are active in the defence and maritime electronics space, focusing on high-reliability navigation, communication, and surveillance systems for institutional clients in India. This acquisition is intended to diversify and strengthen Syrma SGS's involvement in defence, maritime, and aerospace markets. "According to recent interviews, the acquisitions are expected to accelerate revenue growth by adding 400 crore in defence sector visibility and leverage complementary expertise to build a stronger technology ecosystem."

Brokerages such as Jefferies and CLSA have maintained their buy ratings on Syrma SGS Technology, citing ongoing margin expansion, diversified revenue streams, and recent strategic acquisitions as key factors supporting continued growth. Institutional investors now hold over 23% of the company's equity, underscoring market confidence. The organisation's debt-to-equity ratio stands at a conservative 0.07, with prudent working capital management providing further financial stability.

These developments come as India's electronics manufacturing sector experiences structural tailwinds, aided by government incentives and policies promoting import substitution. Syrma SGS Technology is actively expanding its presence beyond consumer electronics into the industrial, automotive, and defence verticals, capitalising on favourable sectoral momentum and robust demand in these areas.

Leadership within the company has placed emphasis on the synergies generated by both acquisitions and organic expansion projects. "The leadership emphasized synergies from acquisitions, organic capacity expansion (notably in PCBs and CCL manufacturing), and strategic partnerships as critical catalysts for sustaining 30% revenue growth for FY26 and beyond".

Industry experts have noted the premium valuation of Syrma SGS Technology but point to the company's sound fundamentals, operational flexibility, and broad-based market exposure as strong justifications for ongoing investor interest. "Analysts acknowledge that while valuations are becoming premium, the company’s fundamentals, operational leverage, and diversified market base justify investor enthusiasm."

Management expects the integration of new acquisitions to accelerate revenue growth and build a more resilient technology ecosystem. As the company continues to focus on organic and inorganic growth opportunities in the high-growth defence, automotive, and industrial electronics segments, market sentiment remains positive regarding the sustainability of its performance trajectory.

Later, the stock ended 1.44% lower at Rs 880 against the previous close of Rs  892.85. Market cap of the firm stood at Rs 16,936 crore.