Syrma Tech banks on e-vehicles, IoT for next phase of growth

Talking to DT Next, he said “We have kept up with the promise and stuck to our hiring plans. Investments made two years ago in our Delhi facility has been paying off well. We have bagged new orders to produce in the domestic tariff area and have 10x growth on our book.” The Chennai-based entity has had to “slightly revise” its business plan but it has managed to “strikingly” come close to meet its growth targets. Its merger with the Gurugram-based SGS Tekniks is still pending as the company awaits the final clearance from the National Company Law Tribunal. “The negotiations for the proposal have been completed and we are happy no one has backed out of the deal, owing to the pandemic. But, we expect the NCLT process to take six months for the full merger,” Srinivasan said.

The integration is underway and there is no overlap of domains or common customers. “It is a total debt-free transaction and equi-sized deal, which has simplified a lot of things. This merger has aided us in enhancing our geography, capacity and capability footprints,” he said.

Its plants in Bawal, Haryana and Chennai have a potential of scaling up capacity 2.5 times, making Syrma more self-reliant. Praising the ‘Aatmanirbhar Bharat’ initiative of the Centre, Srinivasan said the ‘Make in India’ thrust has amplified last mile manufacturing efforts, lowering the dependence on China.

“We have sourced from Taiwan and Malaysia to assemble the final product. The COVID-19 did tempt us to consider medical healthcare in a big way but we decided not to pursue it in full throttle. Instead, we continue to focus on smart meters, toothbrush (oral healthcare), ventilators (only design not manufacture) and medical-related industrial products,” he noted.

Syrma has over 3,000 people, of which 85 pc is from TN, as it has penetrated smaller satellite locations such as Uthiramerur, Bargur and Panruti, to beef up its talent pool.

The Rs 1,000-crore entity (post-merger)  (2 units in MEPZ, Chennai, 1 each in Bargur and Uthiramerur (TN), Bawal; SGS has 4 units at Baddi, Bengaluru, Gurugram and Manesar) derives bulk of its revenues (over 55 pc) from the industrial vertical (non-merged) with renewables, healthcare and defence contributing 15 pc, 25 pc and under 5 pc of the business respectively.

The company is eyeing 20 per cent growth in the current year and 40 to 50 per cent in FY22-23.

Apart from three existing Fortune 500 customers, it has six more marquee clients in the pipeline, Srinivasan said, adding the company is upbeat about its new portfolio – the electric vehicle business even as internet of things and smart products would be its mainstay.

Syrma has taken exposure to defence industry with Rs 15 cr worth of domestic business and it is evaluating opportunities related to battery management systems.

The US has been the best destination for its growth while Europe too has yielded good results, Srinivasan said noting that exports constitute 85 pc, which may become 55 pc post-merger.