India Ratings and Research (Ind-Ra) has upgraded Syrma SGS Technology Limited’s (Syrma SGS) bank loan facilities’ long-term rating to ‘IND AA’ from ‘IND AA-’ with a Stable Outlook. The instrument-wise rating actions are as follows:
Details of Instruments
| Instrument Type | Date of Issuance | Coupon Rate (%) | Maturity Date | Size of Issue (million) | Rating assigned along with Outlook/Watch | Rating Action |
| Bank loan facilities | – | – | – | INR7,800 | IND AA/Stable/IND A1+ | Long-term rating upgraded; short-term rating affirmed |
| Commercial paper* | – | – | 7 to 365 days | INR1,100 | IND A1+ | Affirmed |
*carved out of fund-based bank lines
Analytical Approach
Ind-Ra continues to take a fully consolidated view of Syrma SGS and its subsidiaries while arriving at the ratings, given the strong operational and strategic linkages among them, driven by similar business lines and a common management team.
Detailed Rationale of the Rating Action
The upgrade reflects Ind-Ra’s expectation of a continuing improvement in Syrma SGS’s business profile in the near-to-medium term on the back of sustained robust revenue growth and strong profitability, at the consolidated level, as witnessed during FY25 and 9MFY26. The company’s improving profitability is supported by the absence of any major increase in working capital requirements, which will lead to a continued improvement in the return on capital employed (RoCE); this remains a rating monitorable. While the company has cash flow payouts towards the recently announced acquisitions/ investments in 2QFY26, in addition to the capex requirements for the newly announced multi-layer printed circuit boards (PCBs), Ind-Ra believes the spread-out nature of the investments over the years and the company’s strong internal cash accruals will support its credit metrics, which are likely to remain comfortable over the near-to-medium term. Furthermore, the company’s strong liquidity and financial flexibility provide further comfort for the ratings.
List of Key Rating Drivers
Strengths
– Strengthening business profile
– Diversified sector presence and customer portfolio
– Robust revenue growth
– Continued improvement in profitability in FY25 and 9MFY26
– Comfortable credit metrics
Weaknesses
– Working capital intensive nature of operations
– Large capex plans for PCB plant; timely completion and stabilisation remain monitorable
– Forex risk; intense competition and other industry risks
Detailed Description of Key Rating Drivers
Strengthening Business Profile: Syrma SGS’s consolidated business profile continued to improve as indicated by its robust and diversified presence in the engineering, designing, assembling, and manufacturing of products, including PCB assembly, magnetic coils, radio frequency identification (RFID) products, among others. The company’s reasonable presence in the higher margin original design manufacturing (ODM) market (accounted for 12%-15% of the consolidated revenue in FY25 and 9MFY26), which involves providing high-margin designing and engineering services, provides comfort.
The revenue profile also comprises a reasonable mix of exports (9MFY26 and FY25: about 25% of revenue), domestic sales, high-margin, low-volume business (healthcare segment) and high-volume, low-margin business (consumer segment), supporting the business profile. Furthermore, the company’s recent expansion and/or investments plans in (a) PCB manufacturing, (b) acquisition of majority stake in Elcome Integrated Systems Private Limited (Elcome), and (c) entry into a joint venture (JV) with KSolare Energy Private Limited Acquisition and (d) entry into JV with Elemaster SPA , are likely to further strengthen its business profile. While PCB manufacturing will support backward integration and reduce the overall import dependency for the industry, investments in segments such as defense, railway automation, and solar inverters will help the company expand its presence and accelerate growth. Moreover, Syrma SGS’s presence in the business of manufacturing customised RFID tags and labels, apart from PCB assembly, provides it with an opportunity to enter the Internet of Things-led businesses globally. Furthermore, the company is securing new orders for smart metering and in the healthcare sector, which is likely to continue to support its business and financial profile.
Any weakening of the business profile, owing to a change in the revenue composition and/or regulatory requirements, leading to a decline in the revenue and margins, will be a key rating monitorable.
Diversified Sector Presence and Customer Portfolio: Syrma SGS has a presence in diversified industries, with the consumer sector contributing 32% to the revenue in 9MFY26 (FY25: 36%), followed by industrial at 28% (28%), automotive at 24% (22%), healthcare at 8% (8%), and information technology and railways contributing the remaining. Ind-Ra expects the company’s presence in diversified sectors to protect its business profile against a major decline or downturn in demand from any particular sector, including the recent geopolitical issues due to West Asia conflict. Furthermore, the company has a strong clientele with the presence of several reputed and marquee domestic and international customers such as TVS Motor Company Limited, A. O. Smith India Water Products Pvt. Ltd., and Robert Bosch Engineering and Business Solution Pvt Ltd, among others. During 9MFY26, the top three customers accounted for about 30% of the consolidated revenue (FY25: 36%) while the top 10 customers accounted for about 52% (56%). Syrma SGS’s longstanding relationships with its clients and the strong credit profile of its customers support the ratings.
Robust Revenue Growth: Syrma SGS’s financial profile is supported by a 31.5% CAGR in revenue over FY22-FY25. On a consolidated basis, the revenue grew 20% yoy to INR37,867 million in FY25 and 17% yoy to INR33,540 million in 9MFY26. The revenue growth in FY25 and 9MFY26 was supported by strong growth in revenue across all sectors except the consumer segment, which witnessed a moderate decline in 9MFY26 due to the company’s strategy to increase the share of other more profitable segments as part of the overall revenue. The management had guided revenue growth of about 30% yoy in FY26 and expects the revenue growth trajectory to continue over the near-to-medium term.
The agency believes that (a) strong and growing order book (3QFYE26: INR64,000 million; FYE25: INR54,000 million), (b) presence in diversified sectors that are growing, (c) addition of new contracts under industrials or in the healthcare segment, (d) additional revenue from sectors such as healthcare, defense, maritime, energy, railways owing to recent acquisitions such as Johari Digital, Elcome, KSolare, JV with Elemaster and SH Electronics, are likely to support Syrma SGS in continuing to generate robust revenue growth over the near-to-medium term. The agency expects that the recent acquisitions/JVs, undertaken in the last two-to-three years, to help the company increase its revenue and provide additional capabilities (increased product offerings and expansion in additional sectors). and opportunities for cross-selling, thus strengthening the business and the overall revenue profile.
Ind-Ra believes the ongoing West Asia conflict is unlikely to impact the company’s revenue growth materially, due to its diversified revenue mix. The company also does not expect any major supply side constraints to impact revenue growth in the near-to-medium term. Any lower-than-expected growth in revenue in the near-to-medium term will remain a key monitorable.
Ind-Ra believes strong demand for the company’s products, favourable regulatory policies for expansion of such businesses and industries in India through various schemes such as the Production-Linked Incentive Scheme, and increased focus of the global original equipment manufacturers on shifting production and manufacturing to India will also continue to support revenue growth in the short-to-medium term.
Continued Improvement in Profitability in FY25 and 9MFY26: On a consolidated basis, EBITDA has shown a strong growth trajectory over the last 12-18 months with EBITDA improving 94% yoy to INR3,795 million in 9MFY26 (9MFY25: INR1,955 million) and EBITDA margins to 11.3% (6.8%). The consolidated absolute EBITDA grew at a CAGR of about 45% to INR3,238 million over FY22-FY25 (FY24: INR2,191 million). Furthermore, the EBITDA margins improved to 8.6% in FY25 (FY24: 6.9%; FY23: 6.8%; FY22: 10%), driven by a shift in the revenue mix, with the high-margin businesses contributing more significantly and building design capabilities. The return on capital employed improved to 10% in FY25 (FY24: 8%). As management expects revenue from the high-margin businesses to continue to grow, the EBITDA margins are likely to remain strong and the RoCE is expected to continue to grow over the medium term.
Ind-Ra expects the margins to have improved in FY26 from FY25 levels and will continue to improve in the near-to-medium term, owing to the sustained growth in revenue and consequently the absolute EBITDA. Furthermore, the increase in revenue and businesses as part of the recent acquisitions and/or investments are likely to further support the company’s profitability. While Ind-Ra does not expect any major supply-side disruptions resulting from the West Asia crisis to materially impact on the company’s operating profitability, any material increase in the cost is expected to be largely passed on to the end consumers. Any deviations from the agency’s expectations, impacting the company’s profitability will remain a key monitorable.
Comfortable Credit Metrics: On a consolidated basis, the credit metrics remained comfortable till 9MFY26 and are likely to have remained comfortable in FY26 and are likely to remain so in the medium term. The net leverage (total adjusted net debt/operating EBITDA) stood at 1.0x in FY25 (FY24: 1.1x). The total debt of INR6,646 million at FYE25 comprised INR5,213 million of working capital debt, INR898 million of term debt and INR534 million of lease liabilities. The total debt (excluding lease liabilities) reduced to INR5,294 million at 9MFYE26 (FYE25: INR6,112 million) and l nearly 85% of the total debt comprised of working capital debt. The company completed a qualified institutional placement in August 2025 of about INR10,000 million, with the proceeds from the same were used for debt repayment, pre-payment of debt and general corporate purposes, including strategic and growth initiatives till 9MFY26. This resulted in the company becoming net cash positive in 9MFY26.
The company announced four major investments/acquisitions/JVs as part of its 2QFY26 results, which are as follows: (a) setting up a manufacturing plant for multi-layer PCBs and copper clad laminate for a total investment of INR15,950 million, to be spent over nearly six years, (b) acquisition of a majority stake in Elcome, wherein 60% was acquired in FY26 for a total consideration of INR2,350 million and the balance 40% is linked to earnout-based milestone, to be acquired over the next three years, (c) entering into a JV to acquire a 49% stake in KSolare for a total consideration of INR833 million, to be paid over one-to-two years, and (d) entering into a JV with Elemaster wherein Syrma SGS will invest INR330 million for 60% stake and the same has been paid in April 2026.
Ind-Ra expects the credit metrics to remain comfortable, despite the abovementioned investments as these are spread out over the years. In FY26, out of the total investments, the company spent INR2,350 million for acquiring the 60% stake in Elcome and INR500 million-700 million for the multi-layer PCB manufacturing unit, which are likely to have been comfortably met from cash generated through operations and/or part funding from QIP net proceeds. The remaining investments towards multi-layer PCB will be spread over multiple years. Additionally, the PCB project has incentives approval under Electronics Component Manufacturing Scheme from central government and incentive approval from state government, which will flow through the cash flow over next few years. The agency expects the overall credit metrics to remain comfortable over the medium term, owing to (a) a well spread-out investment horizon for new capex plans, even if part of the investments would be debt funded, (b) no major increase in working capital cycle and the incremental working capital requirements likely to be partly funded by debt and partly by internal cash accruals, and (c) unutilised initial public offering (IPO; launched on 26 August 2022) proceeds amounting to INR524 million.
Ind-Ra will continue to monitor investments/acquisitions and incremental working capital requirements, with any higher-than-expected debt-led capex and/or acquisitions and/or working capital requirements remaining a key monitorable.
Working Capital Intensive Nature of Operations: Syrma SGS’s operations are working capital intensive; however, the net working capital cycle has been shortening year-on-year up to FY25, which provides comfort. The net working capital cycle reduced to 79 days in FY25 (FY24: 103 days; FY23: 115 days; FY22: 151 days), despite an increase in the receivable period to 142 days (FY24: 108 days), owing to the addition of customers. The inventory holding period, which is generally long in this industry, also shortened to 108 days in FY25 (FY24: 142 days). The working capital cycle elongated to 92 days in 1HFY26 and (including Elcome) is likely to have elongated further in 9MFY26.
The agency takes comfort from company’s longstanding relationships with its clients w.r.t its receivables and despite a long inventory holding period, the agency takes comfort from the majority of the raw material being purchased against back-to-back orders from customers. The agency does not expect any major increase in the working capital cycle due to the newly added business (such as smart meters, defense and maritime) and/or West Asia crisis, which will remain a key monitorable for the agency. Additionally, the company has guided for a year-on-year reduction in the net working capital cycle in the near term.
Large Capex Plans for PCB Plant; Timely Completion and Stabilisation Remain Monitorable: Syrma SGS has an approved investment plan of INR15,950 million towards the manufacturing of multi-layer PCB and copper clad laminate for automobile electronic equipment, home electronic appliances, IT and medical services in India. While the capex plan has an investment horizon of six years, the agency believes the timely completion of the projects, along with product approvals and stabilisation of operations, are key monitorables. The total capex shall be funded by a mix of equity contribution, subsidy support from central and state governments, and bridge debt funding. Ind-Ra assesses the funding risk to remain low-to-moderate as Syrma SGS has a strong financial flexibility evident from the IPO in August 2022, QIP in FY26 and a diversified lender profile. The timely release of equity from the other equity partners (25% owned by Shinhyup) and subsidy support from central and state governments are also monitorables.
Forex Risk; Intense Competition and Other Industry Risks: The company imports 60% of its material requirements, which exposes it to forex fluctuation risk. While a part of the forex exposure is naturally hedged from exports (about 25% of the total revenue) and it can partially pass on the impact of forex fluctuation to customers, any major forex fluctuation can impact the margins. The supplier concentration increased in FY25 with the top 10 suppliers contributing nearly 20%. Moreover, Syrma SGS is in the business of technology contract manufacturing, which exposes it to the risk of frequent changes in technology. It also has to constantly upgrade and adopt its manufacturing processes and supply chain to meet the requirement of its customers. Also, the company operates in a highly competitive business environment, due to the presence of several organised and unorganised players. This limits its bargaining power/pricing ability, thereby constraining any major uptick in margins to an extent.
Liquidity
Adequate: On a consolidated basis, the cash and equivalents were INR3,422 million at FYE25, including unutilised IPO proceeds of INR1,315 million. The company has raised funds through a QIP of about INR10,000 million in August 2025. The cash and equivalents (including liquid investments and unutilised IPO proceeds) stood at about INR9,300 million at 9MFYE26. The average utilisation of the working capital limits is generally moderate and was about 45% during the 12 months ended February 2026. The liquidity is supported by strong cash and equivalents, and undrawn lines of more than INR6,000 million at the consolidated level, against moderate scheduled term debt repayments of INR200 million-250 million in the next 12 months.
The agency believes that Syrma SGS’s liquidity is adequate to fund the strategic investments backed by strong cash and equivalents, QIP proceeds and undrawn portion of IPO proceeds. Additionally, the cash flow from operations turned positive to INR1,421 million in FY25 (FY24: negative INR1,100 million) owing to strong growth in profitability and the shortening net working capital cycle. Ind-Ra expects the cash flow from operations to have remained positive in FY26 and will remain so in the near to medium term. However, since the company is in the revenue growth phase and the nature of operations is working capital intensive, Ind-Ra believes there will be incremental working capital requirement, which will be either funded through internal accruals or partly through working capital debt. Nevertheless, the company’s dependence on debt is likely to remain moderate. Nevertheless, the company’s strong revenue growth, absence of any major elongation of the working capital cycle and strong cash availability support the ratings.
Rating Sensitivities
Positive: A substantial improvement in the business profile supported by enhanced business diversification and a significant improvement in the scale of operations and profitability, along with consistent growth in the RoCE, while maintaining comfortable liquidity and the consolidated net leverage sustaining below 1.0x, will be positive for the ratings.
Negative: Factors that could, individually and/or collectively, lead to a negative rating action are:
– weakness in the business profile owing to a substantial decline in scale of operations and/or sustained dilution of operating margins resulting in subdued RoCE;
– any significant elongation of the working capital cycle resulting in negative cash flow from operations on a sustained basis;
– higher-than-expected debt-led capex and/or acquisitions leading to the net leverage exceeding 1.5x on a sustained basis.
Any Other Information
Standalone Performance: The company’s revenue was INR31,464 million in 9MFY26 (FY25: INR36,158 million; FY24: INR18,333 million; 9MFY25: INR27,520 million) and EBITDA margins were 10.4% (7.9%; 1.8%; 6.8%). The total debt stood at INR6,099 million at FYE25 against cash and equivalents of INR2,176 million, resulting in a net leverage of around 2.6x. The gross interest coverage was 10.3x in 9MFY26 (FY25: 5.2x; 9MFY25: 4.6x).
ESG Issues
ESG Factors Minimally Relevant to Rating: Unless otherwise disclosed in this section, the ESG issues are credit neutral or have only a minimal credit impact on Syrma SGS, due to either their nature or the way in which they are being managed by the entity. For more information on Ind-Ra’s ESG Relevance Disclosures, please click here. For answers to frequently asked questions regarding ESG Relevance Disclosures and their impact on ratings, please click here.
About the Company
Syrma SGS (formerly Syrma Technology Private Limited), a public limited company, manufactures various electronic sub-assemblies, assemblies and box builds, disk drives, memory modules, power supplies/adapters, fibre optic assemblies, magnetic induction coils and RFID products, and other electronic products. The company is a part of Tandon Group with Sandeep Tandon as chairman of the company. Its manufacturing facilities are spread across Northern India (Bawal, Haryana, Manesar, Haryana, Gurgaon, Haryana, Baddi, Himachal Pradesh), Western India (Pune, Maharashtra) and southern India – Chennai (Tamil Nadu), Bengaluru (Karnataka). The company also has three research centres, of which two are in India and one is in Germany.
Key Financial Indicators
| Particulars (Consolidated) | 9MFY26 | FY25 | FY24 |
| Revenue (INR million) | 33,540 | 37,867 | 31,541 |
| EBITDA (INR million) | 3,704 | 3,238 | 2,191 |
| EBITDA margin (%) | 11.0 | 8.6 | 6.9 |
| Interest coverage (x) | 10.5 | 5.5 | 5.8 |
| Total adjusted debt (INR million) | NA | 6,645 | 6,299 |
| Cash and cash equivalents (INR million) | NA | 3,422 | 3,931 |
| Net leverage* (x) | NA | 1.0 | 1.1 |
| Source: Syrma SGS, Ind-Ra * includes lease liabilities NA – not available | |||
Status of Non-Cooperation with previous rating agency
Not applicable
Rating History
| Instrument Type | Rating Type | Rated Limits (million) | Current Rating/Outlook | Historical Rating/Outlook | |||||
| 18 September 2025 | 4 July 2025 | 29 October 2024 | 30 October 2023 | 11 August 2023 | |||||
| Commercial paper | Short-term | INR1,100 | IND A1+ | IND A1+ | IND A1+ | IND A1+ | IND A1+ | – | |
| Bank loan facilities | Long-term/Short-term | INR7,800 | IND AA/Stable/IND A1+ | IND AA-/Positive/IND A1+ | IND AA-/Positive/IND A1+ | IND AA-/Stable/IND A1+ | IND AA-/Stable/IND A1+ | IND AA-/Stable/IND A1+ | |
Bank wise Facilities Details
Complexity Level of the Instruments
| Instrument Type | Complexity Indicator |
| Bank loan facilities | Low |
| Commercial paper | Low |
For details on the complexity level of the instruments, please visit https://www.indiaratings.co.in/complexity- indicators.
Annexure
List of instruments and names of regulators of the instruments
As required by SEBI CRA Circular dated Feb 10, 2026, a list of activities or instruments falling under the purview of various FSRs, along with the names of respective FSRs, is being disclosed below:
A. Rating Activity
| Sr. No. | Instrument / activity Name | Regulator of the instrument |
| 1 | Listed/Proposed to be listed Bonds/Debentures/Preference Shares (all securities) | SEBI |
| 2 | Unlisted/Proposed to be unlisted Bonds/Debentures/ Preference share (all securities) | MCA |
| 3 | Listed PTCs / Securitisation Notes (originated by entities regulated by RBI)* | SEBI |
| 4 | Listed PTCs / Securitisation Notes (originated by entities not regulated by RBI)* | SEBI |
| 5 | Unlisted PTCs / Securitisation Notes (originated by entities regulated by RBI)* | RBI |
| 6 | Listed Commercial Paper and NCDs with original maturity less than 1 year | RBI |
| 7 | Unlisted Commercial Paper and NCDs with original maturity less than 1 year | RBI |
| 8 | Loan Facilities (Fund/Non-Fund Based) from Bank / NBFCs/ NHB/ FIs ^ | RBI |
| 9 | External Commercial Borrowings and other similar borrowings | RBI |
| 10 | Certificates of Deposit | RBI |
| 11 | Fixed Deposits raised by NBFCs, Banks, HFCs, FIs | RBI |
| 12 | Fixed Deposits raised by corporates other than NBFCs, Banks, HFCs, FIs | MCA |
| 13 | Inter Corporate Deposits/Loans extended by Corporates | MCA |
| 14 | Borrowing programme ~ | – |
| 15 | Issuer Ratings # | – |
| 16 | Credit Ratings for Capital Protection Oriented Schemes (by Mutual Funds and AIFs) | SEBI |
| 17 | Credit quality ratings (CQRs) for Mutual Fund Schemes and Schemes of AIFs | SEBI |
| 18 | Listed Security Receipts | SEBI |
| 19 | Unlisted Security Receipts | RBI |
| 20 | Independent Credit Evaluation (ICE) | RBI |
| 21 | Expected Loss Ratings (For Loan Facilities [Fund/Non-Fund based] from Banks/NBFCs/NHB/FIs) | RBI |
| 22 | Expected Loss Ratings (Listed / Proposed to be listed Bonds / Debentures / Preference Shares (all securities)) | SEBI |
| 23 | Expected Loss Ratings (Unlisted / Proposed to be unlisted Bonds/ Debentures / Preference Shares (all securities)) | MCA |
* Includes securitisation transactions involving assignee payout, acquirer’s payout.
~ The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In Press Release(s) subsequent to issuance(s), India Ratings shall separately capture the rated quantum details along with names of respective regulators.
# There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs.
^ Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions.
B. Other activities:
| Sr. No. | Activity Name | Regulator of the activity |
| 1 | Monitoring Agency | SEBI |
| 2 | Research activities, incidental to rating, such as research for Economy, Industries and Companies @ | NA |
@ permitted by SEBI vide SEBI Master Circular for CRAs.
Note: For instruments or activities falling under the purview of regulators other than SEBI, the grievance/dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.
