Motilal Oswal has just dropped some solid news for investors. The brokerage house is bullish on Syrma SGS Technology, giving it a buy rating with a target price of Rs 630.
This recommendation comes in their research report dated May 14, 2025. Let’s break down what this means, why it matters, and why you might want to keep an eye on this stock.
What’s Happening with Syrma SGS Technology?
In the fourth quarter of FY25, Syrma SGS showed a strong operating performance. Its EBITDA jumped 46% year-on-year and margins widened by 510 basis points.
The secret sauce? A better business mix. Syrma shifted away from its low-margin consumer business, which made up only 21% of revenue in 4QFY25, down sharply from 46% the previous year.
However, revenue took a hit, dropping 19% year-on-year. This was mainly because the consumer and healthcare businesses shrank by 64% and 20%, respectively. Despite this dip in revenue, the overall profitability improved, signaling healthier business operations.
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Why Should You Care?
So, what does this mean for the average investor or someone just keeping an eye on the market? It means Syrma SGS is cleaning house and focusing on higher-margin projects. That’s good news because better margins usually mean more profit, which often leads to higher stock prices.
Motilal Oswal is confident that the story isn’t over. The order book has grown 19% year-on-year to over INR 53 billion as of the last quarter. Management expects revenue to grow between 30-35% in FY26, with an 8% EBITDA margin. That’s ambitious but promising.
The Big Picture
If you think about it, this is like a sports team benching its weaker players to bring in stronger ones — the score might not look great right now, but the future looks bright. Investors love that kind of strategic pivot.
Motilal Oswal’s price target of Rs 630 values the stock at 30 times its FY27 earnings. That’s a solid multiple for a company that’s improving margins and growing its order book.
What’s the Catch?
Stocks like Syrma SGS can be volatile, especially in sectors influenced by changing consumer demands and healthcare shifts. But with strong management guidance and improving numbers, the risks seem manageable.
In a market full of noise, Motilal Oswal’s clear “buy” call on Syrma SGS Technology is a signal worth hearing. If the company delivers on its growth and margin expansion, the stock could be a winner in FY26 and beyond.
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