EMS Stock With Strong Export Growth Guidance, Acquisitions and More to Keep a Watch On

Synopsis: This EMS stock that has given a compounded return of 43 percent in the last 3 years, has now surged by 30 percent in the last one month. This company also saw its exports grow by 45 percent, with 9MFY26 exports at Rs 845 Cr.

A small-cap stock in the business of electronic manufacturing services caters to automotive, industrial, healthcare, and railway sectors, operating in India’s rapidly expanding electronics manufacturing industry, with a diversified product mix, strong execution capabilities, and multi-vertical growth, while pursuing higher exports and selective expansion into defence electronics.

With a market cap of more than Rs 16,200 Cr, Syrma SGS Technology Ltd is the company in the context. This stock has surged about 14 percent in the last one month and has also given a 43 percent compounded return in the past 3 years. 

Business Overview

Syrma SGS Technology Ltd is a leading Indian EMS and electronics design company, delivering end-to-end solutions across automotive, industrial, medical, and consumer segments, supported by strategic partnerships with Qualcomm, Intel, Keysight, Cadence, Altium, Siemens, and NXP.

Financial Overview

In the latest quarter the company saw a YoY revenue growth of 45 percent, going from Rs 870 Cr in Q3FY25 to Rs 1,264 Cr in Q3FY26, while the QoQ went up by 10 percent from Rs 1,146 Cr in Q2FY26. The YoY net profits growth is at 107 percent, going from Rs 53 Cr in Q3FY25 to Rs 110 Cr in Q3FY26, while the QoQ growth stood at 66 percent from Rs 66 Cr in Q2FY26.

Additionally, the company also saw its EBITDA margins rise by 190bps on YoY basis from 11.4 percent in Q3FY25 to the current 13.3 percent in Q3FY26. The company has a 3-year sales CAGR of 44 percent, while the TTM is at 7 percent. The company’s 3-year profit CAGR is at 28 percent, while the TTM number is at 102 percent. The company also has an ROCE of 12 percent and an ROE of 9 percent.

Segment Mix and Growth

Syrma SGS Technology Ltd reported robust multi-vertical growth in 9MFY26, with IT/Railways rising 70 percent, Automotive 30 percent, Healthcare by 30 percent, and Industrial 29 percent. This broad-based performance highlights strong operational momentum across sectors, signaling successful diversification and execution across multiple high-growth verticals, supporting the company’s long-term revenue expansion strategy.

Export Growth

Export for Syrma SGS Technology surged by 66 percent, with Q3 reaching a record Rs 335 Cr, and nine-month exports grew by 45 percent to the current Rs 845 Cr, which is nearly close to full FY25 levels of Rs 854 Cr. In the latest conference call the company has given a target of Rs 1,100 Cr worth of exports for next year, currently this number is more than Rs 800 Cr. 

The company expects export growth due to rising automobile exports boosting demand for its electronics, strong EU presence with a Germany plant, 30 years of export experience, and benefits from the India- EU FTA, which supports sustained export momentum, while the company sees 5 percent of its exports going to the US, and 35 percent of the exports are for Europe. Additionally, the company also stated its Industrial Electronics business segment’s export is 90 percent from Europe.

Acquisition

In the latest quarter, Syrma SGS Technology also announced acquiring a 60 percent stake in Elcome Integrated Systems for around Rs 235 Cr. The acquisition enables expansion into defence electronics, with expected revenue guidance of Rs 280- 300 Cr and higher EBITDA margins of 20- 25 percent, reflecting strategic portfolio enhancement and focus on high-margin, technologically advanced sectors.

PCB Manufacturing Project

The company’s PCB manufacturing project is underway, with Phase 1 capex of Rs 360- 400 Cr, supported by a 50 percent state subsidy. This project would give a  capacity of 720,000 square meters of multiyear line and 480,000 square meters of single layer PCBs. With this industry expected to witness a 45 percent CAGR by FY29, we can expect the company to benefit out of the momentum being built in this space.

The Bottom Line

With strong global demand, rising client wins, and capacity expansion, the smallcap EMS firm appears placed to chase its Rs 1,100 Cr export goal. Backed by India-EU FTA tailwinds with 35 percent of exports to Europe, 5 percent to the US, and 90 percent of industrial electronics exports to Europe, FY27 export growth of ~40 percent looks achievable, though geopolitical, currency, and order-visibility risks remain.

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