Syrma SGS Technology Limited (NSE: SYRMA) Q1 2026 Earnings Call dated Jul. 24, 2025
Corporate Participants:
Unidentified Speaker
Nikhil Gupta — Headof Investor Relations, Corporate Development & Initiatives
Jasbir S. Gujral — Managing Director
Bijay Agarwal — Chief Financial Officer
Satendra Singh — Chief Executive Officer
Analysts:
Unidentified Participant
Achal Lohade — Analyst
Ankur Sharma — Analyst
Kishore Kumar — Analyst
Uttham Kumar — Analyst
Pranjal — Analyst
Bhavik Mehta — Analyst
Keshav Lahoti — Analyst
Keyur Pandya — Analyst
Arshia Khosla — Analyst
Anupam Goswami — Analyst
Vineet — Analyst
Sonali Salgaonkar — Analyst
Praveen Sahay — Analyst
Rajesh Kothari — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Cirma SGS Q1FY26 Earnings Conference Call hosted by Nuama Institutional Equities. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance in the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Achal Lohade. Thank you. And over to you Mr. Louhade. Yeah.
Achal Lohade — Analyst
Thank you. Good morning everyone. On behalf of Nuhama Institutional equities we welcome you all to the Q1 FY26 earnings call of Sigma SGS. Today we have a task for the senior management team of Sigma sgs. I will now hand over the call to Nikhil to take the call forward. Over to you Nikhil.
Nikhil Gupta — Headof Investor Relations, Corporate Development & Initiatives
Yeah. Thank you Achal. Hi, very good morning to you all. Welcome to Sirma SGS Quarter 1 Financial Year 2026 Earnings Call. We have with us today Mr. JS Gujarat, Managing Director, Mr. Jayesh Doshi, Director, Mr. Satyendra Singh, Chief Executive Officer and Mr. Vijay Agrawal, Chief Financial Officer Firma SGS to discuss the performance of the company during the first quarter of the financial year 2026 followed by a detailed question and answer session. During this call certain statements that will be made are forward looking which involve several risks, uncertainty, assumptions and other factors that can cause results to differ materially from those in such forward looking statements.
We request you to kindly refer the disclaimer statement as presented in the earnings release for the same with this I now hand over the call to Mr. J.S. gujarat managing the record for his opening remarks on the performance. Thank you.
Jasbir S. Gujral — Managing Director
Thank you Nikhil. A warm welcome ladies and gentlemen to the Q1 FY26 earning Call of Cinema SGS. It’s my pleasure to share with you that the quarter gone by has been a good quarter and all the vital parameters of the company have shown significant positive improvement. Our EBITDA margins are up from 5.2% of Q1 last year to over 10% in this year.
My gross material margin is also up from 15% to 24%. Now if we see on a landscape of two year period which we normally look at and we don’t focus on quarter to quarter, what do we see? We see a revenue growth of 25%, ETA growth of 50%, PBT growth of 27% and a PAT growth of 32%. So the recalibration of the strategy which the management consciously started executing from Q2 of last year has turned out as we had planned. And we now believe that we are on that curve of growth and in cashing on this platform which we have built over the last four quarters.
It’s also very heartening to note that my exports during this quarter have gone up from 180 of Q1FY25 to 232 in Q1 of FY26 registering a 29% growth. This, despite the looming uncertainty of the tariff was being waged by the US Government. So as the things pan out and settle down, I’m very confident that going forward we would be able to grow on the solid platform which we have built now. I’m also happy to share with you that we have entered into a joint venture agreement for manufacturing of PCBs. The PCB industry in India, in our considered opinion, is ripe for entry of organized players.
The market is estimated at about $5 billion, 90% of which is imported approximately and only 10% is made in India. Out of that 10%, 30% is contributed by one single company, another 40% by eight or nine other organized companies. Ten companies and balanced 30% in the unorganized sector, the small scale industry sector. We believe there is a vacuum for an organized player to come in. And we have decided to come in with a very strong technology partner to encash in on the emerging requirements of PCBs in India. These are being facilitated by anti dumping duties and the PLI scheme.
So I believe that we have exciting times ahead in this particular vertical. We are now manufacturing large format box mill products for exports and for Indian market. And we have added significant out of a significant number of customers which give us the confidence that the growth in the coming quarters will be more than what we have thus far seen. Another very qualitative improvement is that the high margin verticals of automotive industrial have all shown significant growth. Automotive in Q1 of last year accounted for 16%. This year it accounted for about 24%. Industrial in Q1 of last year was 19%.
This year it’s about 30%. And significantly consumer which is a low margin business has shown a planned decline from 53 to 34% of my revenue. Healthcare has also shown a bump from 55% to 7%. IT and Railways is a bit muted, but we expect this to pick up in the coming quarters. On an overall basis I think it has been a satisfying quarter and there was a catch up in the revenue. We are very confident that we’ll be able to do it in the remaining three quarters so that we are able to meet the guidance shared with you.
Thank you very much and I now hand you over to Vijay for a detailed build down on the financial numbers.
Bijay Agarwal — Chief Financial Officer
Thank you. Good morning everyone. I will now take you through the brief financial performance for the quarter ending March 2025. Starting with the revenue numbers, our consolidated total revenue for the quarter is approximately 960 r crore rupees as against 947 crores in the previous quarter we have been able to see good. Our export revenue for the quarter is approximately 233 crores which is again 25% of our total operating revenue for the quarter. Our OEM revenue for the quarter is about 12%.
Coming to gross margin, the gross margin for the quarter is 25% as against 15.5% for the Q1 of last year. The margin improvement is mainly led by healthy business mix, lower consumer and IT business which is relatively lower margin business. And again our continuous efforts on operational efficiency is improved. Our operating EBITDA for the quarter stood at heavy 96 crore crore rupees with a year on year growth of 75% and an operating EBITDA margin of 10%. Coming to PVT. For the quarter it is 67.1 crore. Again strong year on year growth 128%. With a PVT margin of 7%.
Our pack for the quarter is 50 crore rupees 145% year on year growth versus Q1 of the last year with a PAC margin of 5%. Coming to our working capital performance for the quarter we are currently at 69 days of net working capital investment which is largely same as the position it was there 1/4 back also. But again there is a continuous internal focus on reduction of the net working capital D and we are confident of reducing our reward maybe bringing it below 65 days in next few quarters. Moving to our neg position we have a total gross debt of approximately 780 crores.
As against the spinning we also hold a healthy treasury balance of 467 crores. With this my net debt position as on 30th June 2025 is 315 crore rupees. During this quarter we had spent approximately 35 crores rupees of capex towards stuffing the plant and making these into my existing facilities. Largely coming to ROC performance for the quarter this is around 14.5%. Will be calculated on the adjusted Basis and the adjustments are primarily IPO unutilized money and the we expect this to further improve over the year and we as we expect a higher capacity utilization, the revenue growth as Mr.
Vigal has also guided during the call. Once again we reiterate the fact that we continue to focus on high margin vertical operational efficiencies, overall cash flow improvement, networking, capital improvement and with this we are very much confident on delivering the guidance which we have been given so far with this. Thank you very much. I will hand over this call to Mitinder Singh now.
Satendra Singh — Chief Executive Officer
Thank you Vijay and thank you Gujaratji. But most importantly thank you all our customers who have forged their trust in us over last several decades. We’re looking forward to serving you day after day, quarter after quarter and year after year.
And thanks to my colleagues as well who are working every day to ensure that the demands of our customers are satisfied. As you heard from Vijalji and Vijay, we made very very strong progress. The results speak to the fact that our strategy which we built over the last couple of years has been the right one and the results are in line with our strategy. The focus from our perspective is customers obsess with the customers. We are listening to our customers every day. We are adapting our processes, we are adapting our capability and ensuring that we are ready for our customers requirement before the requirements come to us.
We are continuously investing in our people. Leadership team is built already. We are working, we have been working through our processes which we have improved over the last 18 to 24 months and we continue to build capacity as we speak. We have Bangalore planned under construction which we had talked about in last quarter as well and it’s in line. It will go on stream end of this year, early next year, calendar year. In terms of business strategy, I think you already heard about one comment that we are recalibrating our business mix and we are seeing strong growth in the segments which are our focus which is also in industrials as well as on exports.
All in all I think very good quarter and with the efforts we have made, with the processes we have set, with the capabilities we have in our team, I’m looking forward to exciting times ahead and serving our customers to the best of our ability and to their expectations in the end delighting them. Thank you everyone and back to you Nikhil.
Nikhil Gupta — Headof Investor Relations, Corporate Development & Initiatives
Thank you. Sutendra Renju. We are open for Q and A session.
Questions and Answers:
operator
Thank you. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on the Touchstone telephone if you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Ankur with HDFC Life please.
Ankur Sharma
OS. Yeah, hi sir, good morning. Thanks for your time as always. A few questions. One if you could just help me with the order book as of NQ126 and also the mix within that order book.
The context being just trying to understand, you know, the share of industrial, auto, etc. And therefore trying to get a sense of how that the new journey will pan out over 26.
Bijay Agarwal
Sure. So the order would pull to an adjunct quarter end. June 25th is approximately 5450500 crore office. If I give you the breakup, auto segment comprises 35 to 40%. Consumer segment is 25 to 27% as of now industrial is again 25 27%. Healthcare is 6 to 8% which improves MEDF business also and balance in IT and deliveries.
Ankur Sharma
That’s helpful. And if you could just help us again with your guidance for the full year both on top line, also on margins.
Bijay Agarwal
Top line side, we are expecting we should be again get a good growth of 30, 35% over the previous year. Numbers and margin somewhere we are think it should be somewhere in the range of 8.5 to 9% Operating EBITDA margin is what you are saying.
Ankur Sharma
Excluding other income.
Bijay Agarwal
Excluding other income. But it should improve my earning foreign exchange impact.
Ankur Sharma
Okay. Thirdly sir, just on the consumer business and you see positive signs of the way you kind of trying to restrict growth there. But still even in Q1 it’s still sizable, right? Almost 30, 35% of overall mix. So do you believe in absolute terms about 320 crores. So is this where it kind of stays and gets better or do you think while in perfect terms it may come lower? So just trying to understand from a full year perspective and also how you see the consumer business kind of shaping up.
Jasbir S. Gujral
You see we have guided in the FY25 earning call earning call that our endeavor would be to bring down the consumer sort of vertical business to 30% of the total revenues and on an annualized basis we believe that we are on track to achieve that. Now this consumer vertical when we classify it includes low margin, high volume as well as my ODM which is high margin and low volume. So we believe that going forward that we see quarter on quarter it could be 1%, 2% here and there but on an annualized basis we are confident that we should be able to achieve the 30% mark which we had said set out for us at the beginning of the year.
And if my whole ODM high margin low volume consumer business picks up, so be it. It’s a margin accretive business. What we are concentrating on is to bring down the low margin high volume consumer business within this particular bucket.
Ankur Sharma
Sure. Okay. And just one last bit, you know on the PCB manufacturing JV that we proposing to set up. If you could just give us more details, whatever you can share in terms of Capex by when do you expect this plant to come up? What kind of sales margin roes you believe could be made? Also on the customer side, whatever details you can share with these other.
Jasbir S. Gujral
You see we have planned out this PCB plant which would be a multi layer and single layer plant with the capacity of about once it’s fully set up, about 1.5 to 2 million square meters per annum. The capex plan in the phase one which will be spent not in a bullet way but over the next three to four years is $91 million. PCB business typically is a positive 1512 to 15% EBITDA margin business. We believe that with the world class plant and a high technology plant we would be able to drive yield efficiency which would enable us to achieve these EBITDA margins in pcb.
The yield because it’s a chemical process are very very critical and we have a very solid technology partner. I think the beauty of this venture is that we have a very solid technology partner which will help us to address a very huge potential domestic demand which is not available any place outside China. If we scan the world, the PCB demand other than China is all limited. So India offers a virgin territory and if we have a solid technology partner it opens up great vistas of growth for the coming years. So 91 million is approximately the CapEx and this will be entitled to Eli EBITDA margin 15, 18% once the whole process is stabilized and once we move into the higher layer margin business.
Because here also as the layers go up, the margin also goes up. We expect that once the plant is matured we should be able to earn a 20, 18, 20, 20% EBITDA margin and the ROCE of about the same percentage around 20. And this CapEx is also entitled to state government subsidies which are under negotiation which could vary from 35, 40 to 60% of the CAPEX. These will not be bullet payments, these will be payments staggered as we execute the project and because there’s some form of GST fund and there’s electricity subsidy and all those things, employment subsidy and all those things.
So but even if on a conservative basis we say we get about a 40% subsidy, so about 90 million, so 36 million will be subsidized by the potential states who are vying to get this project in their state and balance. 60% will be by up. If we get 60% will be 40%. But so we are taking on a conservative basis
Bijay Agarwal
and there will be a different component pli when it will be a revenue benefit that will be overall. But the margins which we are expecting that should improve to all the benefits today.
Ankur Sharma
Sure. And typically 1x asset terms is what we should build in. Right. Once the plant is fully utilized depends.
Jasbir S. Gujral
Upon which kind of product which we are manufacturing here. As it terms we expect it should vary somewhere between 1.2 times to 2x also.
Ankur Sharma
Okay, sir. Great. That’s all from my side. All the best. Thanks.
Jasbir S. Gujral
Thank you.
operator
Thank you. A reminder to all the participants. Please restrict yourself to one question. Next question comes from the line of Kishore Kumar with Unified Capital. Please go ahead.
Kishore Kumar
So, good morning and thanks for the opportunity. I just have a small query on the jv. What is the timeline that we are looking at it.
Jasbir S. Gujral
A little louder please.
Kishore Kumar
Okay? Yes, sir. Timeline. Yeah.
Jasbir S. Gujral
So the JV agreement is inside application filed with the central government for the PLA team. And we understand the terminal date for the PLA application is the first of July. And in the month of August these applications will be taken up for scrutiny and approval. So assuming we expect the approval to come in somewhere in August or September, we have already applied to the various in talks with the various state governments. So during the period when the application is being scrutinized PLA application we expect to get approvals from the state government with the final set of incentives.
Lands have already been potential. Lands have been identified at a couple of places. So I think by about Q2 end of Q2 by September25 we should be in a position to start the execution of the project. These intervening periods of approximately 45 odd days we would also use for making of blueprint drawings and all those back end work so that we don’t lose time. Once we get the approval from the government, the project on a aggressive basis should go on stream somewhere around Diwali next year. On a Conservative basis between Q4 Q4 of FY26 or end of 9-26-Q4 the commercial production we expect it should start sometime towards Q4 of FY27 or first quarter of FY20.
So 18 months. 18, 20 months, 21 months is what we are targeting for the whole thing. Hello.
operator
Mr. Kumar, please go ahead. Since there is no reply from the line of Mr. Kumar, we’ll take the next. That is Mr. Uttam Kumar from Evndes Park. Please go ahead.
Uttham Kumar
Good morning. Congrats on a good set of numbers. So two questions from my end. Firstly on the gross margins we are seeing that the gross margins have improved because of the consumer business mix going down. At the same time we’d also like to understand are we seeing some kind of a margin shape in the upwards when it comes to automotive in industrial category, are there any special mix which is happening? Is the gross margin trending higher or is there any scope for the mix to increase going forward in these two verticals?
Jasbir S. Gujral
In the automotive sector the margins vary. If we are a tier one supplier or a tier two supplier right now and in the EV space we are primarily year one supplier which gives us incremental margins. The margin profile over the coming quarters and years would improve apart from the above two factors by more efficient, more cost effective purchasing, as our purchase spend goes up, we should be able to negotiate better prices. That’s number one. In the industrial segment the margins are higher in exports, lower in domestic but by and large they are much better than the consumer.
And we have not seen any depreciation of margins in each of the verticals. Only we have seen improvements and we don’t expect than to depreciate in the coming quarters and years.
Uttham Kumar
Got it. So the second question is on exports. So could you give us more flavor on. I mean when you said the industrial categories where you’re doing exports, is there any other categories where that you can and which are the geographies which are doing well including US and other geographies, can you do some mix split and where we can see traction including going forward and eventually over the next two to three years where can we look at this export mix Being for the company.
Jasbir S. Gujral
Exports we are primarily doing to Western Europe and USA mix I think bigger will share between the two geographies. But on an overall basis if we see neither Western Europe nor America is growing at the pace at which our exports have grown, which is about 22% I think in Q1 they are in line. The tariff uncertainty is definitely holding back customers from releasing large orders hopefully within this quarter that’s between now and September. This uncertainty would sort of be a thing of the past and then we can expect More aggressive stance from our customers for going at purchasing from India or other countries.
Currently they are slightly holding back because they don’t know what the tariff thing will pan out. But by all discussions with the chambers of commerce and general thing we don’t believe that India will be placed at a disadvantage compared to its competing countries. At worst it could be at par. But we expect that India will be favorably placed compared to the competing countries.
Bijay Agarwal
Our export to us is somewhere between 5 and a half to 6% and rest is all Europe plus other regions there. That’s the bottom is and on the expectation side again we have guided we should be doing about 24 to 27% of export and for the quarter it is about 24.5% as of now.
Jasbir S. Gujral
So in line with our annual budgets and targets.
Uttham Kumar
Thank you. I’ll get back. Thank you.
Uttham Kumar
Next question comes from the line of Panjal with Morgan Stanley. Please go ahead.
Pranjal
Thanks for taking my question. And I have two questions on the bare board PCB manufacturing that we are foring into. One is if you could add more color in terms of the capability of the tech partner right now that we are dealing with and what is the ballpark mix in terms of the end applications. And number two would be what working capital cycle do we expect in the PCB manufacturing?
Jasbir S. Gujral
See as far as the industries to be serviced by us we would be entering into multi layer double layer PCBs and these will find application in industrial automotive consumer. Also we are currently not venturing into hdi, flex pcb. So mobile phones and all that. We would not be sort of tapping to it in the current sales as well as the technology competence of the partner is concerned. It’s one of the oldest companies in Korea and they have a deep domain expertise of more than three and a half decades in PCB manufacturing. And if we go to the PCB manufacturing per se, it is the process control which is the most critical factor in process control.
It’s the inputs which are the chemicals, the substrates and other things which go which have to be of top class quality with min variation in parameter REF will be putting a world class plant with the latest equipment and these equipments are very very rugged. Once you set the process it really doesn’t change. If you control the process chemicals that go into it, if you control the environment which goes into it then it becomes a comparatively, I wouldn’t call a easy ride but comparatively comfortable ride. The inputs and the parameters are more critical and the machines are capable of delivering the desired output.
So I don’t see any challenge in meeting these requirements. And our technical partner, the collaborator would also give us access to his existing customer logos which he is servicing out of Korea. So if he is servicing a company X in Korea and that company also has a manufacturing operation in India, we sort of get a door opening and then we have to only ensure that our process capabilities meet his requirements. So we are very confident on that and we don’t see a challenge on that. On the working capital requirement, I’ll hand it over to Vijay.
Bijay Agarwal
So working capital side we expect initial investment could be in the range of 60 to 75 days of net working capital investment for this business.
Pranjal
Sure sir. Thanks. That is helpful. And one last question in terms of is there any change in terms of the guidance we would have for our capex for this year and next year in the EMS business?
Bijay Agarwal
In the EMS, yes. The guidance remains same full year CapEx will be less than 100.
Pranjal
Sure. Thank you. That’s it for my side.
operator
Thank you. Next question comes from the line of Pavik Mehta with JP Morgan. Please go ahead.
Bhavik Mehta
Thank you. Just one question. If I look at your revenue guidance of 30 to 35% for full year and with consumers slowing down from 46% of share to 30% share, it means that the rest of the business has to really grow at more like 40% and we haven’t seen that kind of growth x consumer in 1Q. So what gives us confidence that we can see the growth accelerating to 40% over the next three quarters? Do we have that order book already in the bag for from a visibility perspective.
Jasbir S. Gujral
We have the confidence based on the order book and the discussions which we have had with our customers. When you recalibrate a strategy in AMS business, it is not sort of a fast food joint reaction that we discuss in one business and the next business comes immediately. You have to work on it and what working we have been doing for the last four quarters on it would start yielding results in the coming quarters. We are very confident of achieving more revenues especially on the EBITDA margin.
Bijay Agarwal
Also if you see the order book breaker which we have already given here you can see the auto segment composition.
The order book is about 35% plus while the current auto segment in the quarter the natural revenue is 24% here. So you can see we are expecting do at a faster pace. Definitely that’s.
Bhavik Mehta
Okay. That’s helpful. Thank you.
Bhavik Mehta
Thank you. Next question comes from the line of Keshav Lahoti with HDFC Securities. Please go by.
Keshav Lahoti
Hello. Hi. Thank you for the opportunity can you give us some idea how is your current segmental margin, how it was two years ago and possibly what are your plans to take it two years down the line? How you see the company shaping up.
Jasbir S. Gujral
The segmental margins? As I shared in one of the earlier comments, we have not seen any depreciation in the segmental margins and the margin profile of each vertical which we service, which is either the automotive, the ev, the industrial, export, Medtech and all that they are holding and in fact they are showing marginal incremental increase because of more efficient buying and operational efficiency. We don’t see a challenge in maintaining the gross material margin of each vertical as they stand today. We expect them to only improve in the coming quarters and years.
Keshav Lahoti
And so what is the idea of letting go of the, you know, low margin consumer business? Is it they’re not good ROE business or how should we see? Or is it more like possibly the demand slowdown is there?
Jasbir S. Gujral
See it was a conscious call of the management to recalibrate the strategy and this was based on various factors. A low margin business has a positive spin off on the net working capital. But end of the day we have to see where we want to position the company. The growth in the low margin business was high, but in isolation it was still a very small pie. When we see the consumer business per se as it’s available in the landscape, market landscape, the opportunities in industrial, in automotive, medtech, another were also emerging. And we should always be mindful that none of these verticals got compromised because of the consumer business.
Consumer business was very low in the earlier part of 23, 24 and then 24, 25 and it skewed the whole thing. So it’s a cautious decision of the management to in a calibrated way move away from the low margin business. And then the low margin business is also dictated. The top line of the group are no margin business business is also dictated by the PLI limits. So if my PLI limits dictate a certain value of consumer business, I have to limit it to that because that it doesn’t make sense. Hence it was a combination of factors.
Keshav Lahoti
Understood. Got it, got it. What was the smart meter revenue for this quarter and what is the target for this year?
Jasbir S. Gujral
Just hold the smart meters don’t have it offhand. I’ll just get back to you.
Keshav Lahoti
Okay, thank you. That’s it from my side. Thank you.
operator
Next question comes from the line of Kul Pandya with ICC Prudential Life Insurance Co. Ltd. Please go ahead.
Keyur Pandya
Thank you. Just the first question is on the revenue growth for say FY27, I mean with just less than 100 crore of capex this year, how do you see growth in 27? I think in the past you mentioned about 5 kind of fixed asset turn which at current level would basically would suffice to feed your FY26 growth. So if you can just reconcile this or give outlook for 27 as well that would be helpful.
That is first question.
Jasbir S. Gujral
See I’ll just answer the first question which was asked by the earlier gentleman. My smart metering revenue for the first quarter is approximately 55 to 60 crore rupees and it’s in line with what we had expected that it should be anything between 250 to 300 crores this year around that. So that’s the figure. Can you please repeat the question?
Keyur Pandya
So with the current gross block which is which was there in FY25 end and you have passed the guidance of 5x kind of fixed asset turn, you can achieve FY26 revenue. But then with less than 100 crore of capex how do you see growth for FY27? You would have enough capacity to feed that growth.
Jasbir S. Gujral
Yes, you see at the end of the day we expect that once even now if we take current year some of the plants are working at less than 50%. The new plants which have been commissioned are working at less than 50, 40% with capacities. So we believe that once the plants mature and the businesses flow into the new plants we should be able to achieve not only this year’s revenue but with some marginal investments every year we should be able to achieve the next year revenue also.
Keyur Pandya
Then what is the steady state fixed asset?
Jasbir S. Gujral
My placement and my balancing capex every year would be to the tune of building 8280. 200 crores will be my annual capex trend whether it is on balancing equipment, some replacement and all that. So I think with that we should be able to. And as all industries mature, as the products mature, the efficiency would come in. Also when we see five asset terms for this year we will be at around 65 to 70% of the total capacity utilization so we have enough space to grow on the same better capacity utilization with similar capex without any further larger adjacency and the asset counts may move up 6% 6 and a half times plus also together at full capacity clients.
Keyur Pandya
Okay, second question on the margin side as you mentioned that order book for automobile or industry is higher than what is Q1’s revenue share? Does that mean that margin should go up in Subsequent quarters of the year.
Jasbir S. Gujral
Well, we believe that with what we have achieved in Q1 we would be able to deliver EBITDA margin of 8 and a half to 9% this year. What we had guided earlier was approximately 8%. So we are believing that based on our Q1 performance, the order book which we have and the execution schedule which we have we should be able to deliver at the top eight and a half to nine percent this year.
Keyur Pandya
Okay, noted sir. Thanks a lot. All the best. Thank you.
operator
Next question comes from the line of Asia Khosla with Nirmal Bank Institution equities. Please go ahead.
Arshia Khosla
Hi. Thanks for taking my question. Sir, I just want to understand. I mean now this puts from 25% of our top line. So what will be your guidance for FY26 and any new geographies that are adding on to this group?
Jasbir S. Gujral
So you said the top line guidance and the geographies which are adding to the growth are these two legs of your question?
Arshia Khosla
Sir, on the exports part of the business.
Jasbir S. Gujral
On the export. On the export we expect that we should be able to cross the thousand crore mark which we earlier guided for 25. FY25. We will fell short of it because of delayed release of orders and approvals by the customers. We are on track. We’ve already achieved 233crore rupees export in the first quarter. And typically as we progress the quarter the revenues go up. And these will primarily be coming in from West Endurance and North America. Primarily. These two geographies will be contributing to the export bucket of the company. Mexico. Yeah. North America.
Arshia Khosla
Understood? Understood, sir. Sir, on and on the IT and railway side, part of the business and that segment, how are we seeing growth in that part of the business?
Jasbir S. Gujral
See it has been a bit muted in Q1. We have the visibility for the remaining nine months and I think it’s in line with what we had guided for the full FY26. Railways is still a lumpy business. We have done about 20 odd crores or 21 crores of railway business. We have orders in hand and I expect that this year it should be between 80 and 100 crores of railway business.
Arshia Khosla
Understood sir. Thank you Dr. Epson.
Jasbir S. Gujral
And next year we are in negotiation with some big sort of RFQs. If those materialize, next year should be a better year for railways. You see these are long term driven contracts. And the initial approvals take a lot of time. Not only with the customer but with the RDSO and other things. And RDSO has its own pace to move. So Whether you can make an elephant dance or not, I don’t know. But that’s the thing. We expect next year to be better.
operator
Thank you. Next question comes from the line of Anupam Goswami with Sud Live. Please go ahead.
Anupam Goswami
Hi sir, a little follow up on the previous question. When you say about auto and industrial going at 40% that sort of order which we have, I want to know sir, what sort of products are we adding new products? Are we adding new customers in this vertical? And if you can give a little broader picture, where is the market size and how much of you can do in a little longer period of time.
Bijay Agarwal
I’ll just clarify first on the order book side when we say auto is about 35 to 40 odd percent but industrially somewhere in the range of 25, 27% as a part of order book. Now coming to the next question on that which are the new customers to like? Customers of product side we have introduced some one more very large product like fuel injector system. There are few more customers which like we are authorized. Airbag system is also which we are currently exploring.
Jasbir S. Gujral
See. Okay, I’ll just dwell on the segments. Let’s take the industrial. Industrial smart meterings and utility metering is one segment which is both domestic and export.
Fuel dispensing in is other large build format for power charging. Vehicle charging is another thing. We’ve got some orders which are exporting to Africa. Then we have the large telecom antennas projects which will start seeing the light of the day in the coming next two quarters. September, August. On the automotive front, addition of new customers and new products from the same customers. And Stinder can add more details on that.
Satendra Singh
I think you covered pretty comprehensively with Ranjit. But what we are doing is we are going deeper into the automotive supply chain. We are working with our existing customers and focusing on some of the new things which are coming in.
Things around safety systems, things around driver assistance system. So those are a couple of areas wherein the changes in the regulation are kind of promoting more electronics coming into the vehicles. So working with existing customers on some of these things. In parallel we are exploring the export opportunities with some of our customers to Europe and us. So these are the two drivers for growth in automotive and we are of course on industrial. We are exploring lots of export opportunities which will take some time to mature but they should give us a significant fillip in the next financial year.
Anupam Goswami
Also, how much is our ODM content at the moment and for our capacity are we how much of an utilization in a space wise or assembly line wise, how much capacity has been utilized till now?
Bijay Agarwal
So ODM is approximately 2% of my total business for this quarter. And capacity utilization is what we are expecting for the full year. This year we would be at around 65 to 70% of the total graph capacity utilization. That includes few of the new capacities developed just like Pune plant. And maybe incremental ground feed expansion in my Bawal and Chennai locations. Everything put together.
Anupam Goswami
Okay sir. Got it. Thank you sir.
operator
Thank you. Next question comes from the line of Vineet with Investech. Please go ahead.
Vineet
Good morning sir. Thank you for the opportunity. So just wanted sorry to harp on this revenue growth beta again. Now when we are speaking about 30 35% sort of revenue growth that implies a fairly steep ask for the remainder of the year. And considering consumer business will remain capped at let’s say 30 32% of our revenues then the ask rate for other segments is even higher. So what, what gives you confidence? Or is it a case wherein we’ll have to run at full throttle to be able to get there?
Jasbir S. Gujral
See in the coming quarters this quarter the it has been muted. The it will go up in the remaining nine months or eight and a half nine months. My MedTech business is typically rear loaded. That will be an incremental thing to it and then my exports also. So overall yes there would be a significant bump from the current whatever thing Is to about 30 40% quarter on quarter growth. We have to show in the remaining 3/4 based on the orders in hand which Vijay has shared and the two key factors which have just eliminated the it, the Medtech and some other large contracts which we are executing.
We believe we are in position to achieve the 30% growth rate which we have guided. Which means that we have to do approximately. We have done about 900 of course this year. So we have to do about 44,000, 4100, 3900 to 4100 in the remaining three quarters. Which translates to about 1300 crore rupees per quarter on an average basis. It will not be average basis. Based on the holistic thing which we have seen, we are confident that we should be there about what we have done.
Bijay Agarwal
Also if you see the seasonality, normally quarter one is like 2022% of the full year revenue there.
So if you’re targeting somewhere around 4800-5000 crore for revenue for the full year. So quarter one is in line with that thing about 20 hours. And generally it’s like this 22, 22% moving to 2325% quarter two and gradually then the revenue moves. And generally when that trend we are seeing H1 is about 40, 45% of the full year and H2 like 50, 55%. That’s what the trend is.
Vineet
Understood. Understood, sir. And the second question on working capital now, while we were expecting some improvement this quarter which hasn’t come through, and now we are honestly back to where we were, let’s say a couple of years back as far as the working capital was concerned, while we had the aspirations of getting it down to 60% at one point in time, now we are speaking about more like a 65, 65 days of working capital levels now. So what has really changed is it purely the mix impact wherein the consumer has gone down, which has hurt us here?
Bijay Agarwal
First of all, I think we are exactly at the similar level where we were in the previous quarter, also 69 days of working capital, where we were at March. And right now we are seeing we are at 690s as the working capital. And when we are guided for the full year we will bring in around five to seven days of efficiency. But actually for the full year it may not reflect exactly in the quarter one or maybe four sleep two days every quarter that may not happen. And we are very clear on this thing. It’s like quarter on quarter, you can see the benefits here.
And we are confident and there is nothing like nothing much has changed. We are confident we should be able to bring it below 65 days. Now how much below 69 can we achieve? 60 or 62 or 63. That is something we are yet to see.
Jasbir S. Gujral
Another factor which I think we should all be mindful of is in the sector which we service consumer sector has a quick turnaround, shorter gestation period, industrial and all that. When we are building up new customers, new models and all that, we have to stack the inventory and you can’t buy for 10 pieces and make 10 pieces.
You have to buy for a minimum order quantity and maybe supply the 10, 15, 20, 50 prototype pieces and then the series production commences later on. So quarter on quarter, we would love to do it, but it’s not possible. But for the year as a whole, pays again on whatever visibility we have got on the order executions and all those things with the same level of inventory. If my revenues go up and they have gone up in the past, it automatically comes down as number of days. So it’s a play of absolute trigger of inventory which a minimum has to be carried and how fast you execute them.
So when you’re executing New orders, they take time. There’s a prototyping, there’s a. What’s it called? As they call it the first thin series. The series production starts two, three months down the line. So on the overall basis I think we should be nearer to what we had guided, which is 60 days. In fact we are guided below 60 days but I think it should be around 60 days. 65, 60. I think it’s possible and you will see it in the coming quarters.
Vineet
Okay, understood. Thanks for this. Thank you.
operator
Thank you. Next question comes from the line of Sonali Salgaonkar with Jeffries India. Please go ahead.
Sonali Salgaonkar
Thank you for the opportunity. My question remains on CAPEX. Now you did talk about $90 million of PCB manufacturing CAPEX of this about 40% you are expecting from state subsidies. So may we check what is the capex guidance for SI 2627 and how much do you think would the central government subsidy in terms of ECMs also accrue to this subsidy part?
Jasbir S. Gujral
Okay, now if you. The CapEx which is 91 million, it is for the phase one of the project which may spread over three to five years. I personally believe that in the next 12 to 18 months when we start the plant with a certain capacity, initial capacity should be a voltage a third of the total which would be about 30 to 35 million dollars. Once those capacities go on stream then we’ll modularly keep adding additional capacities. The understanding with the state government which the policies of various governments are in public domain is that they disburse the incentive once you cross a certain milestone and typically it is done on an annualized basis.
So whatever we spend in say 25, 26, we may get a subsidy in 2627. So there could be a year, a year and a half lag between the dispensing of the expenditure, extending of the expenditure and receipt of subsidies from the government. On the PLI piece we expect it will be around 5 to 7% of the revenue number.
Sonali Salgaonkar
I understand. So what is the effective capex for FY26 27 outlook?
Bijay Agarwal
So excluding this PCB it should be around 80 to 100 crore rupees. Including this PCB there is another $30.
Sonali Salgaonkar
Million of capex spread over the next two years, right? Yes, understood. And my second question is regarding the exports. Now you did mention that 5 to 6% goes into US and the rest into Europe. So in the US I understand there is tariff uncertainty but should the hypothesis be that we, we will stick to the 26% tariff which has been imposed earlier, do you Think it will be a passon which will be done from the end users bit or do you think that there could be a margin impact for us.
Jasbir S. Gujral
See on the tariff part. On the tariff part what you are referring to. End of the day it’s a game of dance and there are three players who have to absorb this. It’s either the ultimate consumer or my customer or me. There’s no fourth player who’s going to absorb this tariff cost. These things will pan out and stabilize. And for us to say that it will be impacting only the end consumer and not me or not my customer it’s very difficult to predict. So it’s a deep negotiation with the customer which will happen and then it will be there.
Bulk of it in my opinion. Bulk of because a tariff will be common to almost all the my customer. So if it is a common factor to all my customers or customers of my competitors then logically bulk of the parents should be passed on to the end consumer. The residual part will be bone of contention between me and my customer or my competitor and his customer consumer. How it pans out unique to me then passing it on to the consumer would be tough but it will be a global sort of a so called pan national America scenario.
And I don’t think India will be placed at a disadvantage with or with all competing countries.
Sonali Salgaonkar
Understood. So as of now the shipments are on track to the US right.
Jasbir S. Gujral
We have grown by 22 odd percent or whatever the shipments are on track. The volume could have been even higher but for this what you call uncertainty. Single unfloor.
Satendra Singh
Yeah. I think one thing we need to be aware of first is our export growth has been good and we have guided for a certain number about thousand crores. So we see that on track. Important thing is given the uncertainty around the tariff situation we are discussing very closely with our customers. We are working with them plans to ensure that they are supported and basis the current understanding the tariff.
Everyone in the industry is expecting it to be either neutral or favorable to India and that if it turns out to be favorable I would expect expect that it would help us grow our exports even further. And in fact we see tariff as a big opportunity for India not only for Selma SGS but for India to start playing a bigger role in the export markets.
Sonali Salgaonkar
Got it. Under ECMS apart from ECB any other categories you would be interested or evaluate right now to you know apply for?
Jasbir S. Gujral
We have not applied for currently but there would be some mechanical and non passive component but they’re small. There would be more for Backward integration and all that. They’re not significant in terms of capex requirements, they’re not significant in terms of CAPEX requirements and even in terms of revenue. But we may apply for sort of inductors on components on that. But they’re not the game changer for us in this scheme of things. Hence we have not alluded to that in our commentary.
Sonali Salgaonkar
Got it. And just one last question from my side. The PCB manufacturing, when do you expect it to start building revenues for you from which quarter and probably the initial utilization is it fair to understand you’ll be sub 20 30% in the first year?
Jasbir S. Gujral
See we expect that trial production of it could start by Q3 of FY27 which is October to December of calendar 26. It all depends on when the approvals from the government come in. If the government delays the approvals of the PLIC by three months then obviously the project gets delayed by some more time. Maybe not exactly three months but it will definitely get pushed down. So it all depends on if we were to get the scheme sort of approval in say 30, 40 days by September and we are able to get the thing then we are working backwards and we are working on the grind board to ensure that we have the production out in Q4 of FY27 which is January to March 27th and we’ll have a full year of production in 2728.
Sonali Salgaonkar
Got it. So very clear. Congratulations and all the best to the entire team. Thank you.
operator
Thank you. Next question comes from the line of Praveen Sahai with PL Capital. Please go ahead.
Praveen Sahay
Yeah, thank you for opportunity. So first question is related to the working capital loan which has increased on the sequential basis by around 33%. Is it because of your mix changes towards on a higher working capital and that’s the reason this working capital loan hasn’t increased.
Bijay Agarwal
Yes, gross debt is increased but you can see simultaneously treasury has also increased on a basis there is million rupees of 50 crore rupees and that is mainly on account of incremental working capital requirements. So the question is is that going to normalize in the coming quarters or it will be at the elevated level because the mix is changing.
It is like mix is like it’s broadly in line. What we are expecting there, what we see going forward we should be able this should normalize or maybe this should be reduced slight a bit going forward.
Praveen Sahay
Thank you sir. And the next is the PLI incentive for a quarter if you can get
Bijay Agarwal
that is somewhere around should be in the range of around 4 to 6 crore rupees.
Praveen Sahay
Thank you, sir. That’s it. All the best.
operator
Thank you. Last question comes from the line of Kishore Kumar with Unified Capital. Please go ahead.
Kishore Kumar
Thank you. So my line was cut last time. I’m sorry about that. So I just have a small query on the laptop business with MSI and Dynabo. What is the current monthly or quarterly run rate and where do we see the full year revenues actually for this business?
Jasbir S. Gujral
See, on the Dyna laptop we are just starting the production. It would start this month or maybe in the month of August. On the msic we make small quantities currently, which is only for the Indian market. Now we are in negotiation with the company that we should also be supplying for the global markets. The current revenue projection which we have given, I think with the products which we are making, the Dyna and the msi, we should be able to achieve the targets for the full year. On the quantities per se, we are guided by some confidentiality agreements and we can’t share that absolute number figures.
But based on whatever offtake they have given us, we are confident of achieving our sales guidance in the IT segment for this year. It could see a significant bump. I again repeat, it could see a significant bump if we were to go back into the manufacturing of motherboards and all that. Because that would make us eligible for the pli. Current laptop assembly is not making us eligible for PLI incentives. So we are in talks with the customers. It’s a chicken and egg story. The volumes of the Indian market don’t justify making of the boards in India.
They are yet to sort of take a call on the servicing of export markets from India once the tariff uncertainty settles down. So that’s a holistic view of the IT business.
Kishore Kumar
Got it, sir. Thank you so much.
operator
Thank you. Next question comes from the line of Rajesh Kothari with ALF Accurate advisors. Please go ahead.
Rajesh Kothari
Thank you, sir. Good afternoon. Great set of numbers. Just, you know, two questions from my side. You have created a number of subsidiaries. So just trying to understand which company basically take what kind of role in each of these companies will play. That’s number one. And number two, apart from pcb, are you looking at any other components? Because there are a lot of new things which has happened in the last three months.
Particularly for example on the defense side and within electronics as well. Because of this, you know, the China constraints on the red earth mineral and so on and so forth. So are you exploring any further options where you think your competence can match for further making India kind of an Athletic. Okay.
Jasbir S. Gujral
On the number of subsidiaries and then I think Vijay will answer that. But I’ll take up your first question. The second question. We are always looking out for opportunities to grow and manufacture and defence is also one of the opportunities. We are supplying some very small parts to government companies in defense which is negligible. But we are very actively pursuing to see where we can fit in in the whole thing. And defence, unlike other industries requires deep domain expertise and a solution or a module to the end user. So defense sector plays out in two parts.
One is I become an EMS partner to one of the big defense players and I do a vanilla EMS bill for him. Whether I become it, Boeing or xyz, any of the defense contractors, I just build products for them that will be a vanilla ems.
The real meat and the stickiness of the business lies in providing solutions. So build up on a module which is available with one of the technology providers and build a solution whether it is a communication solution, whether it’s a radar solution, whether it’s ignition jamming solution, whatever to the end user which could be the paramilitary forces, which could be the armed forces or which could be the defense labs and the defense companies in the government of India.
This vertical is a vertical of interest to us. And as I have always been chaining over the last maybe eight quarters, we are mindful of what we will be entering into and we are evaluating this vertical seriously because we believe it to serve the twin objectives of Made in India and it gives us a new vertical business. Defense business would be a lumpy business. It would not be a regular constant quarter on quarter business. You win tenders, you could see a big bump in your revenues and they could be followed by a certain amount of slowness and then there could be again another attack on the companies.
I think Vijay will answer that question. Subsidies, incorporation. We have incorporated two new subsidiaries in the last quarter which is Sigma Conference Private Limited and Cinema and Private Limited both primarily if you ask about the use, these are something as Mr. Gudran has already explained, we are exploring few of these businesses on the component side and maybe and we are not very much sure whether somewhere there is some kind of a technology association we require we may use these subsidiaries to get those technology partnerships executed in a way that is why these are kind of enabling subsidiaries have been created to be in place and as we progress on our business strategy we will use it for the relevant businesses.
Rajesh Kothari
Understood. One question, follow up question in terms of the total CapEx which also as well probably you might also look for maybe MNA acquisitions. I’m not too sure the tuck in acquisitions whether you are looking for anything actively or not. So in terms of the total capital raising, how do you look at this business? Because one your organic business is growing fast and of course you might have some working capital requirement. Second, your PCB business which is a new venture. Third, maybe some tucking acquisition in case if you are looking for it. So what kind of total capital raising you think you might need over next two years or so?
Bijay Agarwal
See details will be answered by Vijay but on a global, on a sort of holistic basis. We don’t believe that we require a capital infusion for organic business with the profits which we earn, the cash profit which we earn in the tighter working capital cycle management we are well placed to fund all organic growth from the internal equivalent and we are almost a zero debt company. So we have the leverage of utilizing that which is a post tax expense. In any case the usage of the fund where whenever it happened would essentially be for acquisition of in verticals where we are not present.
And I’ve been sharing this every time and for any other greenfield expansion project and del fund side yes we already have some internal approvals. Treasury already in place which has 400 crore plus. But you are right if we happen to at least close something on a good sizable kind of inorganic acquisition but something maybe large capex just like PCB or anything like that we may pay for 100 and that is why that is how we have already taken and have used resolution for this QIP rate of thousand crore rupees as and when we need depending upon the funding we will go for those contracts accordingly that increase will be decided at that point of time.
Rajesh Kothari
So PCB will require fundraising, am I right?
Jasbir S. Gujral
No, you see end of the day PCB it would require some money. When we extend 91 million over the three to five years period the initial expenditure we said is about 30 million. 30 million could be funded by your own equity, maybe some individual partners or from fundraise and then we get back to 40, 50% from the government. So it’s only a great financing which is required. So it’s a thing which will decide once we start rolling out the plans. But one thing is reasonably clear, that fundraise for organic growth may not be required in the coming year.
We have enough cash on bank I think we are a zero debt company, almost a zero debt company and we have internal cash accruals. This coupled with the more efficient working capital management I think gives us ample room for organic growth without infusion. Of external funds.
Rajesh Kothari
Perfect. You like? Great sir. Wish you all the best. Thank you.
operator
Thank you ladies and gentlemen. Due to time constraints we have reached the end of question and answer session. I would now like to hand the conference over to Mr. Gujaral for closing comments.
Jasbir S. Gujral
Thank you gentlemen. For ladies and gentlemen spilling time and having a very honest and interesting exchange of ideas. I close with a comment that we in Surma is here, the team and everyone is there very confident based on our performance for the last four quarters and we are very confident that we will continue to grow with superior margins and make India contribute a little bit of making India a hub for electronics manufacturing. Export continues to be one of our focused areas and other than the mobile companies we are one of the dominant players in export market of electronics.
This coupled with the sort of very cautious effort on corporate social responsibility, ESG compliance, we are building organization and I’m happy to share with you you that there is a global platform ecosystems and we have been lifted. We have gone through this survey and everything and we have come in the top 35 percentile 35% company globally scoring more than 75 percentile points which means we are among the top 35% global company which are adhering to the global ESG norms. So we’re very cautious of that and all our design efforts and everything is all aimed at designing products with energy conservation in mind.
So I think exciting time. It’s been almost three years since we lifted. It has been a good drive and we are thankful to all the investors for the confidence they have imposed in us. And we can assure you that the management will leave no stone unturned to make Cirma SGS a great valuable company. Thank you.
operator
Thank you on behalf of Nuama Institutional equities. That concludes this conference. Thank you for joining us. You may now disconnect your lines.