Kaynes Technology vs Syrma SGS Technology
Kaynes Technology vs Syrma SGS Technology: Imagine a world where circuits hum with life and innovation breathes life into every electronic device we touch. This is the domain of Electronics Manufacturing Services (EMS), which conducts the orchestra behind the scenes of the Tech Symphony. Two companies working in this field are Kaynes Technology and Syrma SGS Technology.
In this article, we will compare Kaynes Technology and Syrma SGS Technology in detail and find out which of the two companies has better prospects for the future.
Kaynes Technology vs Syrma SGS Technology
Industry Overview
India has become a global leader in electronics manufacturing, contributing significantly to India’s goal of becoming a $10 trillion economy.
India’s EMS industry is expected to reach a market size of $80 billion in the next five years, with a significant portion of this growth likely to be driven by mobile, consumer electronics, and consumer electronics. Other sectors such as lighting and automotive are also expected to contribute to this growth.
India is expected to emerge as a major player in the electronics manufacturing industry over the next decade, driven by growing domestic demand and strengthening export competitiveness. The country witnessed a nearly doubling of domestic production between FY17 and FY22, and this trend is expected to continue at a CAGR of 24% between FY22 and FY27.
Kaynes Technology vs Syrma SGS Technology – Company Overview
We learned a little about the industry in which the company operates in the previous part. Now let’s look at a little background on both companies.
Kane Technology
Founded in 2008, Kane Technology is India’s leading integrated electronics manufacturer specializing in end-to-end solutions and IoT-enabled services with over 30 years of experience. The company’s comprehensive electronic systems design and manufacturing (ESDM) services include concept design, process engineering, integrated manufacturing and life cycle support.
Spread over 250,000 square feet across seven cities in India, Kaynes boasts of a strong infrastructure comprising nine manufacturing plants and two service centres. With a customer base of over 250 across three continents, we have a strong global presence.
The company’s infrastructure spans 250,000 square feet across seven cities in India and includes nine production plants and two service centres. We also have a global presence with over 250 customers across three continents.
With 34 years of manufacturing expertise, the company is a trusted partner to leading companies in a variety of industries including automotive, industrial, aerospace and defense, space, nuclear, healthcare, rail, IoT, IT and more.
The company operates through four business segments: Original Equipment Manufacturing (OEM) Box Build, PCBA, Original Design Manufacturing, Product Engineering, and IoT Solutions. OEM printed circuit boards alone contribute 62% of the company’s revenue.
Sirma SGS Technology
Sirma SGS A design-driven manufacturing company with extensive experience in mobility, high-tech, healthcare, consumer, industrial and other solutions. Headquartered in Chennai, we provide turnkey electronic manufacturing services (EMS).
The company’s comprehensive EMS offerings include everything from product design to rapid prototyping, PCB assembly and box fabrication. We also provide customized end-to-end solutions for RFID tags and inlays, high-frequency magnetic components, repair, rework, and automated tester services.
The company has been operating in the EMS field for over 40 years and serves more than 270 customers in 20 countries. Syrma operates 12 manufacturing facilities and three R&D laboratories with a total plant area of 8.25 million square feet.
Some of its major customers are consumer, industrial, healthcare, automotive and IT sectors. The company derives 70% of its sales domestically, with exports accounting for 30%.
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Kaynes Technology vs Syrma SGS Technology – Finance
revenue growth:
Looking at their earnings, we can see that both companies have had notable revenue growth, both in the short term and over the long term. A closer analysis shows that Syrma has seen a 62% increase in revenue in the short term from Rs. 1284 crores in FY22 to Rs. In 2023, it will be $209.2 billion.
A key driver of the company’s performance in FY23 was its continued efforts to partner with key customers around the world, primarily in the automotive and consumer industries. During FY23, the company’s order volume increased to Rs. 3,000 crores from Rs.1,200 crores in the previous financial year.
Similarly, Kayne’s order volume has increased significantly from Rs. 1,516.6 crores in FY22, an impressive increase of Rs. 2,648.2 crores in FY23 considering the company’s revenue growth increased from Rs. 706 crores in FY22 to Rs. 112.6 billion in FY23. However, Kaynes’ growth was relatively slow at 59%.
However, over the long term, Kaynes has been able to grow its revenue at a CAGR of 45% since FY20, while Syrma has been able to grow at a CAGR of 33%.
The table below shows the total revenue growth of Kaynes Technologies and Syrma SGS over the past four years.
increase in net profit:
Both companies have roughly matched revenues, but not net income. Looking at the long-term perspective, we see that Kaynes Technology has the highest net profit growth, increasing from Rs. 9.4 Crores in FY20 is a whopping Rs. Maintaining a CAGR of 116% to $952 billion in fiscal 2023.
Syrma SGS lags far behind Kaynes Technology in terms of net profit as its revenue increased only by Rs. 91 crores in FY20 to Rs. Revenues for FY23 were $123 million, a CAGR of just 10.57%.
The table below shows the net profit growth of Kaynes Technologies and Syrma SGS over the past four years.
profit:
Comparing the operating profit of the two companies, you can see that while both companies increased sales and profits, only Kaynes Technology showed an improvement in operating profit margin. On the other hand, Syrna’s operating profit ratio decreased due to increased operating costs.
The figures below compare the operating profit margins of Kaynes Technology and Syrma SGS Technology over the last four years.
The net profit margins of both companies reflect a similar pattern to their operating profit margins. While Kaynes Technologies has seen its net profit margins improve every year, Syrma’s margins have halved over the past five years.
The figures below compare the net profit margins of Kaynes Technology and Syrma SGS Technology over the last four fiscal years.
rate of return:
The impact of margins can be seen in the returns for both companies. Both Kaynes’ ROE and ROCE have improved year over year, indicating that the company is providing good returns on shareholder capital and using its resources efficiently.
On the other hand, Sirma’s return rate declined year-on-year with a slight improvement in FY23. This indicates a decrease in the return shareholders receive on their capital and a decrease in the efficiency with which the company utilizes its resources.
The figure below highlights the RoE of Kaynes Technology and Syrma SGS Technology over the past four years.
The figure below highlights the RoCE of Kaynes Technology and Syrma SGS Technology over the last four fiscal years.
Debt vs. Equity:
The debt ratios of both companies over the past five years are showing positive signs. Both companies have less reliance on borrowed capital, which means they are able to retain more profits because they do not have large obligations to repay debt and pay the interest on it.
The figures below highlight the debt-to-equity ratio of Kaynes Technology and Syrma SGS Technology over the last four financial years.
Kaynes and Syrma also reported interest coverage ratios of 4.5 and 7.95, respectively. This indicates that Kaynes and Syrma earned enough profits to cover the additional 4x and 6x interest payments.
The figure below highlights the interest coverage ratio of Kaynes Technology and Syrma Scgs Technology over the last four fiscal years.
Kaynes Technologies vs Syrma SGS- Future Plans
So far, we have studied the financial statements of companies and understood the performance of each company. Now, let’s take a look at the future of both companies and see what they have in store.
Keynes Technologies
- The company aims to achieve an accelerated growth trajectory by steadily expanding its customer base in the ESDM market.
- The company plans to move up the value chain and manufacture more sophisticated aerospace electronics.
- The management has allocated a total of ₹98.9 Crores for upgrading the existing facilities located in Mysuru and Manesar. 500 billion won was also invested. 149 Cr has set up a new electronics manufacturing unit at Chamarajnagar.
- Kaynes aims to drive revenue growth and margin improvement by identifying and expanding new technology applications in consumer electronics, smart technology, IT accessories, and sensor-based IoT solutions.
Sirma SGS Technology
- The company currently holds orders worth 50 million won. 3000, which is approximately Rs. It was an increase of 120 billion won from the previous year. Syrma plans to complete at least 70% of the project in FY24.
- The company has received RDSO approval from Indian Railways. Although the contribution of trains is currently minimal, the company expects its business to increase through rail.
- The company’s Capex in FY23 was approximately Rs. 17 billion. In FY24, it was planned to expand greenfield capacity to Rs. 20-26 billion.
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Kaynes Technology vs Syrma SGS Technology – Key Indicators
The Kaynes Technologies vs Syrma SGS comparison is almost complete. Let’s take a look at some important indicators for stocks.
conclusion
The comparative study between Kaynes Technology and Syrma SGS Technology has been completed. Both Kaynes Technology and Syrma SGS Technology have demonstrated impressive growth trajectories in India’s fast-growing Electronic Manufacturing Services (EMS) industry. However, Kaynes performed better in terms of margins and returns when compared to Sryma.
Looking ahead, both companies have ambitious expansion plans. Kaynes Technology aims to move up the value chain and diversify into new technology applications, while Syrma SGS is leveraging its strong order book and exploring opportunities in the rail sector.
Written by Aaron Barth
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