CHENNAI: The electronic manufacturing services (EMS) industry continues to witness supply constrain six months after the US-Iran war broke out as the companies are finding it to difficult to source key components and unavailability of chemicals for semiconductor, though the industry is seeing robust demand across the sectors.
During the earnings call on Thursday, India’s leading EMS player Syrma SGS Technology said that the industry is heavily impacted by the war as it faces supply shortage of key component parts and chemicals used for making PCBs.
“To tackle this issue, we have taken a cautious call of treating inventories as strategic asset for the next one or two quarters and not as working capital until the geopolitical tension eases in the Gulf region. Secondly, we have created a war room to address this component issue in our company, so that whenever there is a shortage of critical parts it will be resolved sooner than later, said Jasbir Singh Gujral, MD of Syrma SGS.
According to Syrma, this decision will enable the company to have higher number of inventories and longer duration to clear off them which will be directly into the its financial statements. Singh also said that the company has seen 61% growth in its overall export during the quarter and the shipment of own-designed manufactured (ODM) products grew 100% year-on-year.
The company also said that 60-65% of the construction of PCB plant in Naidupeta, Andhra Pradesh has completed and it has invested Rs 50 crore into the plant, meanwhile overall stood at Rs 90 crore for the quarter. The Naidupeta plant is expected to be operational by April 2027. Moreover, in the current quarter, the company has onboarded 18 new clients across the sectors. The company has reported a net profit of Rs 94.06 crore in Q1FY27 compared to Rs 53.77 crore during the same period in FY26, driven by growth in robust growth in export, especially in the ODM segment.
According to the company, export generated 24% of total revenue in the current quarter at Rs 387 crore, while ODM business was Rs 270 crore for the quarter. The Chennai-based EMS company has reported a revenue of Rs 1,442.82 crore in Q1FY27 against Rs 908.05 crore in Q1FY26. Its order book as of June 30 stood at Rs 6,770 crore.
In the June quarter, the company has also announced joint venture with Japanese conglomerate Kaga Electronics, which is expected generate nearly Rs 300 crore revenue in the long-term. Together, the JV will have a capex of Rs 25 crore initially. The purpose of JV is strengthen Syrma’s domestic supply ecosystem and further deepen its presence in automative sector as Kaga is one of the largest suppliers of automative components in the world.
