Thank you, operator. Good morning, everyone.

On behalf of Axis, I welcome you all to Q3 FY26 earnings con-call of Syrma SGS Technology Limited. We have with us the entire management of the company.

At this point, I will hand over the floor to Nitesh Gupta, Head of Investor Relations of Syrma, to take the proceedings forward. Thank you.

Yeah. Thank you, Nikhil.

A very good morning to everyone. Welcome to Syrma SGS's third quarter financial year 2026 earnings call.

We have with us today Mr. J.S.

Gujral, Managing Director; Mr. Jayesh Doshi, Director; Mr.

Satendra Singh, Chief Executive Officer; and Mr. Bijay Agrawal, Chief Financial Officer, Syrma SGS, to discuss the performance of the company during the third quarter of the financial year 2026, followed by a detailed question-and-answer session.

Kindly note, during this call, certain statements that will be made are forward-looking, which involves several risks, uncertainties, assumptions, and other factors that can cause results to differ materially from those in such forward-looking statements. We request you to kindly refer to the disclaimer statements as presented in the earnings release for the same.

With this, I now hand over the call to Mr. J.S.

Gujral, Managing Director, for his opening remarks on the performance. Thank you.

Thanks, Nitesh. Ladies and gentlemen, a very good morning and welcome to Syrma SGS Q3 FY26 earnings call.

The last 3 months have been good and exciting, and I'm happy to share that the company has posted robust performance on all parameters. If you look at the sales, my Q3 sales have gone up by 45% compared to last Q3 of FY25.

EBITDA has shown a very healthy growth of 101%, up from ₹79 crore to ₹159 crore. PBT and PAT have also registered corresponding good growth of about 108%.

One of the redeeming features of this quarter was a 66% growth in my exports, up from ₹202 crore to ₹335 crore between Q3 FY25 and Q3 FY26. Now if I sort of scan the 9-month performance, again we find that the performance is in line with what we had guided, and in fact better on some of the parameters.

We have achieved in 9 months revenue of about ₹3,350-odd crore, with operating EBITDA of ₹370 crore, up from ₹208 crore, a PBT of ₹295 crore, up from ₹146 crore, a PAT of ₹227 crore, up from ₹113 crore, and exports up by 45% from ₹576 crore to ₹837 crore. Going into sort of a bit granular details, what is satisfying and gives us confidence of maintaining this tempo of performance is almost a secular growth across all verticals.

All the sort of four cylinders are firing. The auto has grown by a robust margin, sort of growth of 30%, medtech by 31%, industrial by 29%, IT railways because the base was very low, it has shown a robust performance of 70% growth.

This gives us the confidence that going forward, we would be able to achieve the guided figures and maybe exceed on the margin front. When we started off this year, we had guided a margin of 8%, EBITDA margin of 8%, which was revised to 9%, and now we are confident that we should be able to deliver ₹500 crore-plus of EBITDA, up from ₹324 crore of last year, which would translate into a 55%, 57% growth against a targeted growth of 30% which we had guided.

Going forward in the coming year, we believe that we are well poised to sort of capitalize on the emerging opportunities and grow healthy growth rate across all verticals such that we would be able to deliver a 30% growth rate in the coming year also. One of the factors which we should keep in mind is that this performance has been under sort of the so-called cloud of tariff uncertainties from USA.

We have been hoping for the last quarter or 4, 5 months that it would settle. We are still very hopeful that in this quarter, the tariff uncertainty should be out of our way.

When I say our, it also applies to the entire industry. One very positive thing which has happened a couple of days back is the signing of the EU FTA with the EU Union.

This, in the long run, not in the short run, not maybe in '26, '27, but in the long run, I think it bodes very well for the electronic industry in two ways. A, some of the end equipments which were attracting duties, they have been rationalized or brought down to zero or very low duties, which would enable export of end products from India, automobile as a case.

Now if automobiles are exported, the electronics which go into the automobile, we are there to service that. Plus it creates a broad ecosystem and environment, a positive environment, that going forward the trade with EU would see a upright stick.

We are very strong in EU. We have been exporting for the last 30 years.

We have a plant in Germany. I believe that in the long run the FTA would help us in sustaining the growth of our exports, which as I just shared have grown by 45% over 9 months, and I expect that we should be able to cross the ₹1,000 crore, maybe close to ₹1,100 crore in the coming year.

We're already sitting at ₹837 crore of exports. On the domestic front, the industries which we service are seeing robust growth, and I expect the growth to continue in the coming year also.

As far as the new verticals or projects are concerned, our PCB project is on track. The construction has started, and we expect the construction to be completed by about June, July.

Parallely, the equipments are being ordered, and we are on track to start the trial production by December '26, January, March '27 quarter so that we have a first 1 year of sales from the capacity which we are creating this year. Further capacities will be created based on the demand, which we believe would be very good, and that we believe that the additional capacities which you have planned should come in sooner than later.

We have sort of expansion of capacity in Pune. We have acquired the Elcom.

The deal has been closed, and we expect that going forward, defense vertical would contribute to the bottom line more and to the top line as a proportionate figure little lower because it'll be about 5%, 6% of our overall revenue. On the whole, I think it's been very satisfying 9 months on the financial parameters: performance, delivery, everything.

One soft thing which we believe is of very great significance for our company and the country is that we have got the gold rating from EcoVadis, which is the ESG compliance, and we are now rated among the top 5% companies globally. Last year it was a bronze rating, we have qualified from bronze to gold.

Some of our customers are in platinum, I think the journey is on and we'll endeavor to do that. With that, I hand over to Bijay to run you through with the detailed number crunching.

Overall, I think the team has done very well and we are happy that we are on track and are delivering what we have guided the street. Thank you.

Thank you, sir. Good morning, everyone.

I'll now take you through our brief financial performance for the quarter and 9 months ended December 2025. I can start with the update on Elcom first.

During the quarter, we consummated the deal sometime middle of December. For about 15, 16 days, we have been able to include or consolidate financials of P&L performance of Elcom also.

Considering the same, our overall total consolidated revenue for the quarter is ₹1,274 crore, as against 891 ₹891 crore corresponding quarter previously last year, registering a 45% growth year-on-year basis. Our total revenue for the 9 months is approximately ₹3,350 crore, which is again a 17% growth on a year-on-year basis.

The robust growth for the period is contributed by higher growth in auto, industrial, healthcare, and mainly export business. The consumer sector business for the quarter is approximately 31%, which is in line with our previous guidance.

Our export revenue for the quarter is approximately ₹335 crore, highest ever for quarter, which has grown by 65% on a year-on-year basis. For the 9 months, it is around ₹837 crore, which is again a 45% growth year-on-year basis.

Overall export business mix is approximately 25% for the entire 9-month period, which was about 22.5% for last financial year. We can see overall export has improved by almost 250 bps in the overall revenues.

Our ODM revenue for the quarter is approximately 16%. Coming to gross margin, gross margin for the quarter is 27.4%, as against 26% for Q3 of last year.

The margin improvement is mainly led by higher export mix, higher ODM, higher industrial and healthcare business, and also lower consumer and IT, which is relatively lower gross margin business. We again continue to focus our efforts on operational efficiency improvement further to improve margin.

Our operating EBITDA for the quarter stood at healthy ₹159 crore, with a year-on-year growth of 100%, and an operating EBITDA margin of 12.6%. The current quarter consolidated EBITDA also includes ₹12 crore from Elcom consolidation.

Excluding Elcom, apple-to-apple basis, it is ₹147 crore. Our 9 months operating EBITDA is approximately ₹370 crore, which has grown by 78% year-on-year basis.

And 9 months operating EBITDA margin is approximately 11%. PBT for the quarter is ₹138 crore, and for the 9 months it is ₹295 crore, which has grown again by 105% on a year-on-year basis.

PBT margin for the 9-month period is 8.7%. Coming to PAT performance, PAT for the quarter is ₹110 crore, which has again grown by 108% year-on-year.

PAT margin is 8.7% for the quarter. Similarly, for the 9-month period, PAT is ₹227 crore, with 100% growth on a Y-o-Y basis.

Overall net working capital days investment as on December end, we are running the business at around 76 days of net working capital days investment. These numbers also include consolidation of Elcom, if we remove it to make it apple-to-apple, net working capital days investment is 68 days, which is 5 days lower than the previous quarter.

That much of efficiency we were able to bring in during the quarter, and considering the same, overall operating cash flow for the entire 9-month period is now positive for the company. We again continue to focus on reduction of net working capital days by another maybe 3 to 5 days over the next 2 to 3 quarters.

Moving to our debt position, we have a total gross debt of ₹529 crore as on December end, and as against same, we are carrying a healthy treasury balance of ₹933 crore. With this, we have a net cash position of ₹404 crore as on December end.

Coming to capex spend, it is all on track. We have been able to spend around ₹55 crore during the quarter, and for the entire 9 months, it is approximately ₹115-₹116.

Coming to ROCE performance, ROCE for the quarter is approximately 16% on adjusted basis when we adjust it for the goodwill and unutilized IPO money. We expect this to improve further up for the year when we are able to take the full P&L benefit, full period-related benefit of Elcom because, as of now, Elcom is already included into the capital employed, but returns should also include it further going forward.

Our order book visibility as on December end is approximately ₹6,400 crore, which includes auto sector related approximately 31%, consumer business about 25%, industrial business 27%, and balance is healthcare, IT, railways. Just an update on the merger, we have already concluded the merger.

Syrma SGS merger is all done, and SGS is already merged into Syrma, there is nothing pending on that side. Once again, we continue to focus on high ticks, operational efficiencies improvement, improving the overall working capital investment and thereby improving the overall operating cash flows.

That is all, and thank you very much. I will now hand it over to Satendra Singh, our CEO.

Thanks, Bijay. Good morning from my side as well.

I think we had an excellent quarter, as already summed up by Mr. Gujral and Bijay in their remarks with numbers.

I couldn't be happier. I think this is a culmination of all the efforts made by our team across the plants, across all support functions, and most importantly the customers.

We have a very healthy, strong pipeline and we are looking forward to exciting times ahead. Our factories are getting busier, as Mr.

Gujral alluded to in his remarks. We have seen a utilization improvement between quarter 2 to quarter 3, almost 5% up, and that would mean that we are very closely watching for expansion of capacities.

Last quarter I had commented that we are building a factory in Bangalore. That's on track and we are looking forward to more capacity enhancements in this year, which will obviously be required and the right step to do to meet the exciting growth ahead.

Strategy-wise we remain very focused. We are working basis what we always believed in and what we continue to execute on.

First things first: customer. We're listening to the customers very, very carefully, working with them, walking the walk, and ensuring that we are ready as and when they want us to be ready with the capacities, with the systems, with the competencies needed to support their business.

We have continued focus on the segments which we always talked about: auto, industrial, medical, railways. We are continuing to build our capabilities.

I think last week also brought in an interesting news to the trade and manufacturing ecosystem, which is the Europe-India deal. I think that's as the newspapers call it mother of all deals.

I would kind of believe that this is going to be a significant impact on the way businesses are growing. It definitely will bring strong tailwinds to Indian electronics companies.

We at Syrma SGS have been in European market for more than two decades, and we have been physically present for almost a decade via our factory and engineering presence in Stuttgart. We are looking forward to building on that to ensure that our export growth, which already Bijay said we grew almost 45% year-on-year, we're looking forward to using our position there, our knowledge of the market, to ensure that we have a solid growth.

Last but not the least, I think we continue to be a business which is keeping doing all the right things required for the planet. That's reflected in our EcoVadis rating moving from bronze to gold.

There is a clearly way ahead. Our endeavor would be to get to platinum, but the good part is that we are on the right track.

With this, I'll turn it back to Nikhil. Thank you very much.

Looking forward to exciting times ahead. Nikhil, over to you.

Yeah. Thank you, Satendra.

Over to you, operator, for getting into the Q&A session.

Hi. Good morning.

My question is for consumer. We have seen a swing of 116 ₹116 crore in this quarter, and also in industrial ₹120 crore.

I understand industrial is majorly driven by the smart meter. Can you talk on consumer side?

What is leading this kind of growth? Because we have focus on high value, high margin business for consumer, what we have discussed earlier.

That is number one. Number two, what other subsegment is driving industrial?

We have done approximately ₹390 crore in this quarter, while it was ₹365 crore in the previous quarter. There is a growth of approximately ₹23-₹24 crore over the last quarter.

This is again mainly largely driven by telecom business, which we are doing the set-top boxes, GPON, IDU, ODU, that is one large thing. Additionally, the consumer sector driven ODM business what we are doing is like water purification and maybe some bit of RFID tags going for consumer end use.

Those are the products which we are doing in the consumer segment.

Now you see, end of the day, when we started off this year, we had said that we would like our consumer sort of basket to be about 31%, 30%, 31% of our revenue. For this quarter, it is at about 30%, and even if I say for the full year, it is at about 32% of the total sales.

I think we are on track. The industrial is driven by across the sort of applications, including exports.

It's not purely driven by the energy metering, which is a domestic business, but by growth in my exports. My exports predominantly are in medtech and industrial, with a component of automotive also which is touching around ₹100 crore.

It's the business growth across verticals, and within verticals across applications. That's what is, I think, the strength and satisfaction which we derive when we see the quality of growth, that it is not driven by one leg, all the cylinders are firing.

Within them, within each vertical, the different applications are also growing secularly with marginal variations. Some will grow faster, some will be at a slightly sort of lower clip than the fastest one.

Okay. Can you talk on the industrial side, what is the smart meter contribution of overall industrial in Q3?

Also in IT and railways, what is the mix of railway in IT and railway increase in this quarter?

In this IT and railways, during the quarter we have done approximately ₹82 crore, of which railways is only ₹17-₹18 crore, and balance is IT. Similar way in the industrial break-up, smart metering is less than ₹50 crore for the quarter here.

How much?

Around ₹50 crore.

Smart meter?

Yes.

In industrial, we have a higher proportion of telecom?

Industrial exports, other applications.

Industrial has power supplies, it has exports, it has the metering.

Okay. Yes, sir.

Thank you so much.

Yes, thank you. Good performance here.

Looking at your full year guidance, 30%, 35% year-over-year growth requires so fourth quarter it implies about ₹300 to ₹500 crore sequential growth. How can you help us get there?

Because that's a pretty strong year-over-year acceleration that's required. Of course, Elcom will contribute.

How much is Elemsa closing included in guidance? Then I have a follow-up question.

Okay. Now if you see the quarter-on-quarter performance, Q1 we had a negative revenue growth of 19%.

Q2 we did a 37-odd percent positive growth. From a negative 19, 18, 19 to 37, it implies whatever the growth is.

In Q3, this 37 has grown up to 44% or 45%. Q4 going forward, we're confident that we should be able to grow sequential target which we did about ₹1,264 crore, we should be able to grow this figure by about ₹1,600-plus, such that we should be sitting at anything between ₹4,850, ₹4,900 to ₹5,000.

That's the range. To me, the revenue figures are very important, but more important is the EBITDA.

I think we started off the year with the guidance of ₹400 crore of EBITDA. We are already sitting at ₹370 crore in 9 months.

Even if I exclude the ₹12 crore of EBITDA which has been consolidated, it means ₹358 crore. I'm very confident that we should be able to cross the ₹500 crore mark of EBITDA for the full year.

If 500 we do, then it's almost like 58-odd percent increase over previous year, and it would have a similar positive increase in the PAT. Once the PAT goes up, it'll have a similar positive impact on my EPS.

I think on the final points of performance, I think we are delivering or exceeding what we had committed to the street.

Just to add here, we are not expecting any revenue from Elemsa JV in the fourth quarter. Also, Elcom-related, we are expecting ₹100 to ₹120 crore of revenue in the quarter 4.

That would be included there in that.

Got it. Okay.

Elcom We

are also expecting healthcare higher number in the next quarter as it is always a much more rear-loaded business in any year.

Got it. Okay.

Thank you. Thank you for that clarification.

Seems like you have pretty high visibility into '27 as well. Can you help us think about some of these segments and what the key drivers are, and if you can bracket sort of growth rates for each of these segments, that'll be helpful.

Thank you. See,

as I just shared that if I see my 9-month performance or my sort of 3-month performance, all my major verticals are growing at a pace of 30%-plus. Railways and IT, because of a low base, grows at about 70-odd percent.

I expect this secular growth among verticals to continue. Some may grow some may grow at 35, some may grow at 28, but on a overall basis, we believe that we are in a position to deliver a 30% growth on top line and on EBITDA in the coming year, in the coming year, '26, '27.

Okay. That makes sense.

Thank you very much.

thank you for the opportunity and many congratulations for such a wonderful result to you, Gujral ji, Bijay ji, and the team. Sir, my first question is margin trajectory has been really strong this quarter.

Bijay ji did talk about the levers for that, but just wanted to get in a little more detail. Because if I look at the product mix in Q3 FY26 versus Q3 FY25, consumer, autos were broadly in and around the same percentage of sales as they are right now.

Keen to understand what led to this excellent margin and the sustainability of the same.

See, as we have all the time been saying, we don't concentrate or point on quarter-on-quarter margins. Even if you recall, my Q4 of last year I think it was about a 12% EBITDA margin, Q4 of last year.

This time this is in Q3. Let's not say that Q3 becomes the base for future projections.

What we are saying is that we guide a 30% growth in absolute EBITDA, which translates into 10% EBITDA margin going forward. What drove the margins in Q3 is my export performance.

See, exports is a very high-margin business, and it has grown by 66% compared to Q3 of last year. In exports, we are up from 202 to ₹335 crore.

This ₹135 crore additional sales results in a comparatively very high contribution towards EBITDA. Similarly, if I see my performance on industrial, my industrial is 31% in quarter 3, grown 46% over corresponding period of last year.

These high-margin verticals, where the growth has come this quarter, has resulted in 12-odd percent of EBITDA. Going forward, we guide that we should be able to deliver a blended EBITDA margin of 10% for the next year.

Just to add, Sonali, here, you're right. The overall business mix is exactly same as it was in Q3 of FY25.

That is where when you see gross margin level, overall improvement is only 1% because of the better margin controls or maybe some bit of procurement efficiencies. The larger part of savings is coming because of the scale improvement versus Q3 of FY25.

There's a 45% of scale improvement, which is also helping us into operating leverage improvement. That is where the overall EBITDA margin increase is 3.5% versus Q3 of FY25.

Got it, sir. Very clear.

Sir, and just one last question. For the PCB manufacturing, we had set out the overall capex estimate to about ₹15 billion INR.

How should we look at the per annum capex guidance considering that we'll be doing this capex in phases? Is about ₹3 billion per annum a fair number to go by in FY26, '27?

Okay. In the first phase, which would be completed by December '26 for '26, '27, we should be spending approximately ₹360, ₹370-odd crore, ₹360 to ₹400 crore, which would give us a capacity of 720,000 square meters of multilayer line and 480,000 square meters of single layer PCBs.

The facility which is being created is to accommodate two additional multilayer lines. The civil and the infrastructure which we are creating, the attendant utilities and all that, they are all geared up for my full three ML and one ML means multilayer and one single layer line.

I personally believe that the stuffing of the multilayer lines, the additional multilayer lines, would be sooner than what we had envisaged. We had envisaged that the second and the third line would come towards end of calendar '27 or beginning of FY27, '28.

I think it would be preponed because the traction or the inquiries or the interest which we are receiving from potential customers is very strong. This year it is about ₹360 to ₹400 crore, and next year I think on the PCB for this would be approximately the same amount.

Purely dependent on demand. As far as the ₹1,500 crore you said, that also included CCL and HDI and flex.

We are yet to receive the approvals of the government because we had also planned starting of those projects in '27, '28.

Overall, the ₹1,500 crore we are planning to spend that by FY30 in totality.

Understood. Got it.

Very clear. Thank you, and all the best to you.

Thank you.

Thank you for opportunity and many congratulations for a very good set of numbers. My first question is related to the export because the last year I can see that the US contribution for the export were on the higher side, and now again, even after a lot of fluctuation because of a tariff, you are doing very good in the export as well.

Can you give some geographical indication from where you are getting a growth, as you already highlighted industrial contribution in export is on the higher. Also, is that the Elcom contribution in the export is also there?

No, Elcom is all domestic consumption, domestic sales, it is not included in the export. The exports which for the 9 months stand at ₹837 crore versus last full year's exports of about ₹858 or ₹860 crore.

These exports have primarily been driven by my robust growth in the industrial exports and also medtech and healthcare. Healthcare is pre-eminently to USA, and other are primarily to EU.

Breakup-wise, you have the breakup?

Breakup-wise, during the quarter we have done almost ₹103 crore on the healthcare side and about ₹178 crore on the industrial side out of the total ₹335 crore.

Geographical also if you can?

Sorry?

Geographical bifurcation if you can give for 9 months? 35% is US and 35% is Europe, and industrial is largely 90% is Europe.

My medtech business is pre-eminently going to US USA. My RFID and EMS business is directed towards EU and maybe Mexico and something to that.

Geography-wise, yeah, I don't have the figures offhand. We'll have to sort of work out.

I think it should be maybe 55, 45, but I have to work on the figures.

Right, sir. Any number on PLI for a quarter and 9 months if you can share?

PLI annualized number for any year is near about ₹30-₹32 crore for us that way. That's what is coming in the normal business.

There are no abnormal variations quarter-on-quarter.

Yes.

Okay. Thank you, sir, and all the best.

Hi, sir. Good morning.

Congratulations on a very good set of numbers. Sir, my first question is if you could possibly spend just a couple of minutes on all the newer initiatives, especially the defense acquisition since it's consummated in our numbers.

If you can just give some direction on where we want to take this business in terms of revenues, how it's going to sort of be accretive to our margin profile, and what sort of return ratios does it enjoy. One is on defense.

Second is, if you can possibly just for the bare PCB project, indicate what kind of applications we are sort of aiming at. Will it be more industrial, auto, what are the segments which you're looking at?

What would the indicative margin profile be on basis your current projections for the bare PCB plant? Yeah.

Thank you.

Okay. Now on Elcom, we've just acquired it, and this year we believe that Elcom as an entity, I'm not talking about what it will be consolidated into because of the previous 9 months which were not done, Elcom should be delivering anything between ₹280 to ₹300 crore of revenue, Elcom as an entity.

The entire thing will not get line-wise, it will not get consolidated into overall things. Going forward, we expect that this business has the potential to grow at a maybe 10%, 15%, 20% with the present offering of bouquets of products which we have got.

Obviously, when we have acquired a platform and we have got our foot in the door in defense applications, we would like to increase the bouquet of offerings. Next year, I think if we are doing about ₹280 to ₹300 crore this year in Elcom, next year we should be taking it anything between a 10% to 15% growth rate because in defense, the gestation period is pretty long and the orders could also be lumpy.

As far as the margin profile is concerned, this is a high-margin business, and the margins are upwards of 20%, 24%, 25%, which we believe we will be able to sustain in the coming years also. That's as far as Elcom is concerned.

On PCB front, we are in touch with customers in the industrial, automotive, and consumer segment. Industrial is a very wide application.

Energy metering is one of them. Broadly in the PCBA industry, the margin profile is 15% to 17% 15% to 17% EBITDA margin profile without the PLI.

I think we would be in line with the industry margins and grow in the industrial and automotive segment. Automotive also within automotive, there are various categories: the lighting PCBAs, the infotainment PCBAs.

We'll be catering to the entire sort of consumption what you call the PCB which goes into the automotive. Subsequently, we would also be targeting the medtech.

They are high-end PCBAs and have a longer approval cycle, we'll be plucking the low-hanging fruits in the initial phase, and parallely build up the ecosystem and the pipelines to target the high-end PCBAs, which would also include exploring export markets.

Follow-up on the PCB

Yeah. Just a follow-up on the PCB business, right?

We've spoken about multilayers, but what kind of multilayers are we going to do till what amount of

Typically, if we analyze the PCB consumption, about 10% to 15% is HDI and other things, and rest is all single and multilayer. If we further drill down, bulk of the consumption, which I say if I take the total pie as 100, 75% of that, 70% to 75% of that would be sub-8-layer, single to sub-8-layer or 8 layers.

Then as you go up in the layer profile from 8 to 10 to 15 or whatever, like oxygen, it gets rarefied. The quantities keep reducing.

We are targeting the market which is available, which is bulk market. I'm not saying that we will not be targeting the 15-layer or 12-layer, but the volumes are very less.

Fair point, sir. Thank you, sir.

Thank you so much for your clarifications.

Hi. Just one clarification, sir.

Apologies if I am repeating. I joined a bit late.

Did you share your order book number? Can you reshare it if you have already shared?

Order book?

Yes.

Yes.

We have already shared. Total order book and visibility is approximately ₹6,400 crore, and out of that, around 31% is from auto segment, about 25% from consumer segment, and approximately 27% from industrial segment.

Balance is healthcare, IT, and railways.

Exports, sir?

Exports are within. Say when they say industrial, it'll be exports.

Medtech is all exports.

Export is about 24% there in that.

In the order book visibility. 24%, 25% of the enhanced value.

If we are doing about ₹1,100 crore this year, next year we expect this figure to go up further. If you're targeting a 30% growth rate, we should be having a 25%, 30% growth rate in exports also.

Sure. Thank you.

All the best.

Hello?

Aniruddha Joshi here. Just one question.

After all the acquisitions, M&A, what is the goodwill on the balance sheet? How do you see the, in a way, writing off of the or amortization of the goodwill panning out over next 2, 3 years?

Will it qualify for any tax benefits? Second question, what is the capex that we are looking at for FY26 sorry, FY27 and '28?

Lastly, what is the current net working capital inventory days or debtor days, if you can share? That's it from my side.

Thanks.

To answer your first one on the goodwill and intangibles and the tax benefit and the amortization of the same, that is something we are working out along with our valuers and the auditors together. Probably in the next quarter result, we will be able to disclose it completely that way.

Whatever intangibles is coming out of that PPA valuation, purchase price allocations, that intangibles will be eligible for a tax benefit, amortization and tax benefit. Goodwill is something we will not be able to amortize it, there will not be any tax benefit or P&L impact of the same thing.

That is something we will be able to disclose properly in the next quarter results. Coming to your capex requirement, normal organic-related capex requirement would be ₹80 to ₹100 crore on a year-on-year basis.

Apart from that, special projects just like PCB business-related near about ₹300 to ₹350 crore is what we will be spending over the next year. Beyond that, if we furthermore announce any other new special project, that will be over and above that thing additionally.

Coming to net working capital days requirement, we are already at 76 days of working capital days. That is also including Elcom-related working capital numbers so far.

We are still working on it and trying to reduce this further. Over probably next 2 to 3 quarters, we should be able to bring in an efficiency of around 5 to 6 days.

We have already disclosed that this 76 days, if we exclude Elcom on the current year number, always excluding Elcom, this is about 68 days. That's where we are currently.

It's a 5 days or 6 days reduction from September '23 and a 4 days increase from last year, corresponding period.

Even after considering all these things, my overall 9 months operating cash flow is positive right now, which we are trying to furthermore improve for the entire full year.

No, sir, this is really great. Many thanks for the details.

Thank you.

Hi. Thanks for the opportunity.

Sir, I remember your smart meter revenue which was ₹50 crore each quarter which was coming, and this quarter also you highlighted it is ₹50 crore, totaling ₹150, ₹160 crore in 9 months. Your guidance for this year was ₹300 crore.

Earlier you indicated possibly H2 would be better on smart meter front. What's the update on that side?

See, on the smart meters, one thing is it is a very sticky business in terms of working capital cycle. We don't want to land into a situation where we have the sales, but not the recovery, to be very honest.

The growth is driven by choice. As long as I am confident of delivering on the overall business, and we are selective about customers in the energy metering business.

Hence this sort of slight softness in growth, the numbers of the value of the energy meters. In terms of quantities, we are going well, and because of the sort of a working capital cycle, we at times ask our customers to sort of give us the key dedicated controllers free of cost.

While my quantitative numbers may go up, then the material is being sort of procured by the customer, it does have a impact on the value of sales. There are two, three factors: A, the working capital cycle, we're choosy about the customers we service.

If I am not going to be choosy, the business is available. I can grow several times what I'm doing today in the energy metering business, but I don't want to land in a situation where the sales cycle does not result into a sort of a shorter cash flow cycle.

Got it. What is the revised guidance of smart meter revenue for this and next year?

Next year, I think if we are doing about ₹200 crore this year, we should be going about another 20%, 25%, 30% next year. Again, the company's focus on, is overall growth with profitable margins and positive cash flow.

These are the three parameters. If we find that the growth is not coming, then go into the sort of sticky business, sort of a sticky thing where the cash flow cycles are long.

If we are able to manage the growth without the longest working capital cycle business, I think we'll prefer that.

Understood. Got it.

One last question from my side. The guidance of 30% revenue growth, this is including everything, Elcom and whatever inorganic you do, or it's purely organic you are talking?

See, we had guided last year also, this year also we are saying that we'll be growing at around 30%. Now this year when we say we are growing at this rate from whatever we did last year, ₹324 crore EBITDA, ₹3,700-odd crore of revenue, it will be apple-to-apple, and the Elcom will be in addition.

Next year, since Elcom comes into our fold, we would share the defense vertical separately, but then the growth overall would be blended of all the things. If we are able to do about a ₹5,000 crore, ₹4,900 crore of revenue this year, a 30% growth will be what would result into.

More importantly, if we deliver a ₹500 crore EBITDA, which I'm very confident, it's not if, we'll deliver a ₹500 crore EBITDA this year, next year 30% growth rate is ₹650 crore of EBITDA.

Got it. That is very helpful.

Thank you so much.

Also, just to add on the previous question, the breakup of export. During the 9 months, we did total export of approximately ₹835 crore, of which near about 255 is to US, and balance ₹580 crore is for other markets other than US, which includes Belgium, Germany, Mexico, Canada, and China, and Singapore together.

Hi. Dhrumil Shah this side.

Thank you for the opportunity. Great performance, and good luck for the future.

Sir, my only question is regarding a good drop in the finance cost quarter-over-quarter while the debt number is higher. Is it some refinancing of the debt, or can you just help us understand?

Yes. This closing debt was not exactly available for the entire period, during the quarter, the debt number was actually lower.

Yes, we were able to negotiate or renegotiate some of the interest cost with the bankers to achieve some efficiency. It is a result of both the things.

Okay. Got it.

Bijay bhai, the other question is on the tax rate for fourth quarter and next year? Plus you mentioned the total cash outflow from our balance sheet will be around ₹400 crore for capex, like 300 for the PCBA plus 100 for our existing business.

Then next year, we planning to meet this entire requirement with our operating cash flow or how it's going to be funded? On 31st March '27, how the balance sheet will look like?

Of this capex, whatever PCB-related capex, we are planning to raise 50% debt, 50% through equity. Part of that equity, 25% of that equity requirement will also be funded by my partner also.

In totality, yes, including debt or equity outflow, whichever way we can say, capex-related near about ₹300 to ₹350 crore will be the overall outflow here on the capex side. What was your first question regarding the cash balance?

Yeah. On this capex, ₹300 crore from our balance sheet, ₹300 crore will go from Syrma balance sheet?

Yes. See, on the capex for the PCB, ₹350, ₹400 crore, whatever is the figure by March '27, it'll be making us eligible for a 50% subsidy from the government of Andhra Pradesh.

It is sort of a bridge financing over a period of 1 year. Whatever I spend till March of '27, I expect to get the money in '27, '28, 50% of that.

On a full sort of cycle basis, my investment in the PCB project for this phase, if it is ₹400 crore, would be actually ₹200 crore from Syrma. Out of that 200, whatever is the equity portion, 25% will be funded by my collaborator.

Okay. Understood.

My other question was on the tax rate for the fourth quarter and for the next year, what should we be assuming?

Tax rate for the fourth quarter would be somewhere around 23%, 23%, 24%. Next year, we can assume about 26%.

26%. Got it.

Thank you.

Okay.

Thank you, ladies and gentlemen. I think we are well poised, well positioned what we had set out to do when we hit the street in 2022 when we got listed.

We had guided all the investors in the street that we are making a truly global EMS company, and we are sort of on right track for that. In between, there would be bumps, but on a long-term basis, I think we're very well poised with our customers, with our vendors, with all the stakeholders, and to take benefit of the emerging opportunities in electronic manufacturing.

We are building a organization which is now almost there. The capability building is a ongoing exercise, which would continue year-on-year.

When I say capability building, it is introducing the best of the softwares, the best of the tools, online monitoring of performance, of the machines, so that we sort of get a better efficiency out of the sort of assets which we have created. We have, as I shared last time, tied up with a Canadian American company, Arch Systems, which gives us sort of access to online monitoring of my SMT lines across plants.

Sitting in the corporate office, my teams who have been given access can, on a real-time basis, monitor the performance. We have started a pilot project, and the results are very, very encouraging.

If we have, say, 40 lines and 500 hours is per line, it is 20,000 hours of capacity. If I'm able to get a 5% improvement, it gives me 1,000 hours of capacity, which is equivalent to two lines.

I think we have now embarked on a journey to bring in the operational efficiencies, which Bijay also alluded to, that while my gross material margin has improved by 1.7%, 1.5%, my EBITDA margins have improved by almost like 3%. The remaining 1.5% has come in from the operational efficiencies.

We continue relentlessly to work on this. The motto on the shop floor is relentless improvement of efficiencies.

This, coupled with our other objectives of increasing the value, increasing the exports, increasing the ODM growth is a sort of a treacherous path. It's not easy, but we are very focused on increasing that.

This with our foray into PCB and other sort of piece parts under the PCMS policy, I think positions Syrma SGS in a very, very strong position to capitalize on the emerging opportunities within India and outside it. Overall, a satisfactory 9 months globally also, macro also, and micro also.

We believe that we are in a good position to keep growing at profitable margins, and which we have said that our objective is to grow, a, 30% growth on EBITDA, positive cash flows, 25%, 30%, 35% growth on top line. These three are the cornerstones on which we measure our performance, and each one of them has its own importance.

I now hand over to Satendra to get his view on the overall thing. Satendra, over to you.

Thank you, Gujral ji. I think this was a great call from all of us.

We are very excited about the growth we have reported, and we're looking forward to great future. Thank you, everyone.

Have a good rest of the day.