Syrma SGS Technology zooms after CLSA initiates coverage with 'buy' rating, sees 24% upside potential

Syrma SGS share price, Syrma SGS share price target, CLSA on Syrma SGS: Syrma SGS Technology shares zoomed on Thursday, March 7, after foreign brokerage CLSA initiated coverage on the electronic manufacturing services firm with a 'buy' rating. The stock rose by as much as Rs 40.3 or 7.7 per cent to Rs 560.1 apiece on BSE, halting a four-day falling streak.

At 2 pm, the stock held on to about half of its intraday gain, up 1.85 per cent at Rs529.45 apiece with high volumes on BSE. 

About 0.94 lakh shares changed hands in intraday trade so far, as against a daily average of 0.3 lakh recorded in the past two weeks, according to provisional exchange data.

Syrma SGS share price target 2024: CLSA assigns 'buy'

While assigning a 'buy' rating to Syrma SGS, CLSA set a target at Rs 645 per share for the stock The brokerage's target implies an upside of 24 per cent from the previous close.

CLSA said that the company is on a strong runway for growth, with the following levers: 

• New segments: such as lighting, aerospace & healthcare
• Inorganic expansion
• Industry tailwinds

The brokerage forecasts the industry to expand at a CAGR of 22 per cent over the next couple of decades. 

According to CLSA, margins and the return trajectory will be the key monitorables for the stock, while key downside risks include execution concerns and insourcing by OEMs.

Syrma SGS Technology shares: Past performance

Syrma SGS Technology shares have rewarded investors with a return of nearly 90 per cent in the past year, sharply outperforming a nearly 27 per cent rally in the headline Nifty index.

Syrma SGS Technology Q3 results

Syrma SGS reported a consolidated net profit of Rs 15.52 crore for the quarter ended December 31, 2023, as against a consolidated net profit of Rs 33.2 crore for the corresponding period a year ago.

Its quarterly revenue from operations grew to Rs 706.7 crore from Rs 512.6 crore a year ago, according to a regulatory filing.

What does Syrma SGS Technology do?

Syrma SGS provides high-mix, flexible volume, and precision OEM manufacturing services.

It is a one-stop-solution producer for a host of electronics manufacturing services (EMS) including product design, quick prototyping, and box build, repair and rework. 

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