Syrma SGS Technology: Building India's Next Electronics Manufacturing Powerhouse

Syrma SGS is expanding into PCB manufacturing, defense electronics, and exports, creating multiple growth drivers. Strong order book, rising margins, and global opportunities support future growth.

Source: Motilal Oswal Financial Services Research Report (27 May 2026)

Introduction

India's electronics manufacturing industry is entering a transformational phase. Supported by government incentives, rising global demand, supply-chain diversification away from China, and increasing domestic consumption, the country is rapidly emerging as a global manufacturing destination.

Among the companies positioned to benefit from this trend, Syrma SGS Technology stands out as one of the most promising players in the Electronics Manufacturing Services (EMS) sector. Over the past few years, the company has steadily expanded its capabilities across automotive electronics, industrial solutions, healthcare devices, RFID products, memory solutions, and electronic assemblies.

However, the company's latest strategic initiatives suggest that Syrma SGS is no longer content with being a traditional EMS provider. Instead, management is building an integrated electronics manufacturing platform with exposure to high-growth and high-margin segments such as Printed Circuit Board (PCB) manufacturing, defense electronics, industrial automation, medical technology, and export-focused manufacturing.

According to Motilal Oswal Financial Services, these developments could significantly improve the company's revenue quality, profitability, and long-term growth prospects.

Understanding Syrma SGS Technology

Syrma SGS Technology is one of India's leading electronics manufacturing companies. The company provides a wide range of services, including:

• Printed Circuit Board Assembly (PCBA)

• Box Build Assembly

• Product Design and Development

• Radio Frequency Identification (RFID) Solutions

• Memory Modules

• Magnetic Components

• Electronic Subsystems

Its customer base spans multiple industries, including:

• Automotive

• Industrial Equipment

• Medical Devices

• Consumer Electronics

• Information Technology

• Telecommunications

• Railways

Unlike many EMS companies that rely heavily on low-margin assembly work, Syrma has increasingly focused on engineering-intensive solutions that generate stronger margins and create deeper customer relationships.

India's Massive PCB Opportunity

One of the most significant announcements from Syrma SGS is its entry into PCB manufacturing.

Printed Circuit Boards are the foundation of nearly every electronic product. Whether it is a smartphone, electric vehicle, industrial machine, medical device, defense equipment, or communication system, PCBs are a critical component.

Despite India's growing electronics ecosystem, approximately 88% of PCB demand is currently met through imports.

This creates a massive opportunity for domestic manufacturers.

Industry estimates suggest:

• India's PCB market is currently worth approximately USD 6.3 billion.

• The market could grow to more than USD 21 billion by FY32.

• PCB demand is expected to grow at a CAGR of 15-16%.

As India pushes for greater electronics self-reliance, local PCB manufacturing is expected to become a strategic priority.

Strategic Partnership with Shinhyup Electronics

To capitalize on this opportunity, Syrma SGS has entered into a joint venture with South Korea-based Shinhyup Electronics.

The joint venture structure includes:

• Syrma SGS – 75% Stake

• Shinhyup Electronics – 25% Stake

This partnership provides access to proven multilayer PCB technology while reducing technology and execution risks associated with greenfield projects.

Instead of developing technology from scratch, Syrma gains immediate access to manufacturing expertise and technical know-how from an established global PCB manufacturer.

Why the Andhra Pradesh Facility Matters

The upcoming PCB facility is being developed at Naidupeta in Andhra Pradesh.

The location is strategically important because it sits within India's major electronics manufacturing corridor connecting:

• Bengaluru

• Chennai

• Hyderabad

This region hosts numerous automotive manufacturers, telecom equipment companies, industrial electronics producers, and export-oriented manufacturers.

The location offers several advantages:

• Faster customer servicing

• Reduced logistics costs

• Just-in-time delivery capability

• Lower inventory requirements

• Reduced dependency on imported PCBs

Currently, many Indian manufacturers depend on imports from China that often require 45 to 60 days of lead time.

Local manufacturing can significantly shorten supply chains and improve competitiveness.

Cost Advantage Against China

One of the most interesting aspects highlighted by the research report is India's emerging cost competitiveness.

According to industry estimates:

• PCB manufacturing costs in India can be 18-25% lower than China.

• Indian labor costs are roughly 20% of Chinese labor costs.

As global manufacturers continue to diversify supply chains, this cost advantage could position India as a significant PCB manufacturing hub.

For Syrma SGS, this creates opportunities not only in domestic markets but also in exports.

Long-Term Revenue Potential from PCB Business

The PCB project is expected to be implemented in phases.

Phase One Investment:

₹400 Crore

Future Expansion Plan:

₹1,500 Crore by FY30

Expected Revenue Potential at Full Scale:

₹2,500 Crore annually

Importantly, management expects nearly 80% of PCB production to serve external customers, creating an entirely new revenue stream beyond Syrma's existing EMS business.

This means PCB manufacturing is not merely backward integration but an independent growth engine.

Entering the High-Growth Defense Electronics Market

Another major development is Syrma's acquisition of a majority stake in Elcome.

Elcome has more than four decades of experience serving defense and maritime customers.

The company specializes in:

• Navigation Systems

• Surveillance Equipment

• Communication Solutions

• Marine Electronics

The acquisition provides Syrma with immediate access to defense electronics, one of the fastest-growing segments in India.

Why Defense Electronics Is Attractive

India's defense modernization efforts are creating substantial opportunities for domestic manufacturers.

Key trends include:

• Rising defense budgets

• Localization of procurement

• Indigenous manufacturing initiatives

• Reduced import dependence

The Indian government's "Buy Indian-IDDM" policy strongly favors domestically designed and manufactured products.

As a result, companies with local manufacturing capabilities are expected to capture a larger share of defense spending in the coming years.

The defense electronics market is projected to grow from approximately USD 7.46 billion in 2025 to more than USD 11 billion by 2032.

Elemaster JV: Expanding Global Reach

Syrma has also formed a joint venture with Italian electronics company Elemaster.

This partnership opens opportunities in:

• Industrial Automation

• Railways

• Medical Electronics

• High-Reliability Manufacturing

These industries generally offer:

• Longer qualification cycles

• Stable demand

• Higher margins

• Strong customer retention

Perhaps even more importantly, the JV provides access to Elemaster's international customer network, potentially accelerating Syrma's export growth strategy.

Shift Toward High-Margin Business Segments

Management has been deliberately reducing exposure to lower-margin businesses such as consumer electronics and commodity telecom products.

Instead, the company is focusing on:

• Automotive Electronics

• Industrial Electronics

• Medical Technology

• Defense Electronics

These sectors require higher engineering expertise and create stronger barriers to entry.

As a result, the quality of earnings improves and pricing power increases.

This transformation is already visible in the company's profitability metrics.

Automotive Business Becoming a Key Growth Engine

Automotive electronics has emerged as one of the most important contributors to Syrma's growth.

The increasing adoption of:

• Electric Vehicles

• Advanced Driver Assistance Systems (ADAS)

• Connected Vehicles

• Smart Cockpits

is driving demand for sophisticated electronic systems.

The automotive segment now contributes a substantial portion of the company's order book and future growth pipeline.

Exports Driving Future Growth

Exports continue to be one of Syrma's strongest growth drivers.

Europe remains a major market for the company, supported by:

• Established customer relationships

• Engineering capabilities

• Stuttgart R&D Center in Germany

Management expects exports to continue growing strongly as international customers seek alternative manufacturing destinations outside China.

This trend could become a major catalyst for revenue growth over the next decade.

Financial Outlook

According to Motilal Oswal estimates:

Revenue is expected to increase from approximately ₹4,819 crore in FY26 to over ₹8,434 crore by FY28.

EBITDA is projected to rise from ₹535 crore to nearly ₹976 crore.

Profit After Tax is expected to grow from ₹321 crore to approximately ₹622 crore.

The brokerage expects:

• Revenue CAGR: 32%

• EBITDA CAGR: 35%

• PAT CAGR: 39%

between FY26 and FY28.

Such growth rates place Syrma among the fastest-growing electronics manufacturing companies in India.

Investment View

Motilal Oswal believes Syrma SGS Technology is entering a new phase of value creation.

The company is no longer merely assembling electronic products. Instead, it is building an integrated manufacturing ecosystem that includes:

• PCB Manufacturing

• Defense Electronics

• Industrial Electronics

• Medical Technology

• Export Manufacturing

• Product Design

This evolution has the potential to improve margins, strengthen customer relationships, and create multiple growth engines for the future.

Based on these factors, Motilal Oswal has maintained a BUY rating on the stock with a target price of ₹1,300.

Conclusion

Syrma SGS Technology appears to be strategically positioned at the intersection of several long-term themes:

• Make in India

• Electronics Manufacturing Expansion

• Defense Localization

• Export Growth

• PCB Import Substitution

• Automotive Electrification

• Medical Technology Growth

As India continues its journey toward becoming a global electronics manufacturing hub, companies with strong execution capabilities, technological partnerships, and diversified growth platforms are likely to emerge as long-term winners.

Syrma SGS Technology appears to be one such company, with multiple growth drivers that could support strong earnings expansion over the coming years.

Disclaimer

This article is prepared solely for educational and informational purposes. The information presented is based on the research report published by Motilal Oswal Financial Services Ltd. dated 27 May 2026 and publicly available information. The views, projections, estimates, target prices, and recommendations mentioned belong to the original research source and do not represent the personal views of the author.

Investments in equities and securities are subject to market risks. Past performance does not guarantee future returns. Investors should conduct their own research, evaluate their risk tolerance, and consult a qualified financial advisor before making any investment decisions.

Neither the author nor the publisher guarantees the accuracy, completeness, or future performance of any company discussed in this article. This article should not be construed as investment advice, stock recommendation, solicitation, or an offer to buy or sell securities.

Source: Motilal Oswal Financial Services Ltd. Research Report on Syrma SGS Technology, dated 27 May 2026.