Ladies and gentlemen, good day, and welcome to Syrma SGS Technology Q3 FY 2026 earnings conference call, hosted by Axis Capital Limited. 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 during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nikhil Kandoi from Axis Capital Limited. Thank you, and over to you, sir.
Thank you, Ikra. Good morning, everyone. On behalf of Axis, I welcome you all to Q3 FY 2026 earnings 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 Nikhil Gupta, Head of Investor Relations of Syrma, to take the proceeding forward. Thank you.
Yes. Uh, thank you, Nikhil. Uh, a very good morning to everyone. Uh, welcome to Syrma SGS 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.
Thank you, Nikhil. Ladies and gentlemen, a very good morning, and welcome to Syrma SGS Q3 FY 2026 earnings call. The last three 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 FY 2025. EBITDA has shown a very healthy growth of 101%, up from INR 79 crore to INR 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 INR 202 crore to INR 335 crore, between Q3 FY 2025 and Q3 FY 2026.
Now, if I sort of scan the nine-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 nine months revenue of about INR 3,350-odd crores, with operating EBITDA of INR 370 crores, up from INR 208 crores, a PBT of INR 295 crores, up from INR 146 crores, a PAT of INR 227 crores, up from INR 113 crores. And exports up by 45% from INR 576 crores to INR 837 crores. Going into sort of a bit granular detail, 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 of 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. So 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 INR 500 crore+ of EBITDA, up from INR 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 take 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 our 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 four, five months that it would settle. We are still very hopeful that in this quarter, this sort of thing, that the tariff uncertainty should be out of our way.
When I say all, 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 European Union. And this, in the long run, not in the short run, not maybe in 2026, 2027, but in the long run, I think it bodes very well for the electronics 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 is a case. Now, if automobiles are exported, the electronics which go into the automobiles, we are there to service that.
Plus, it creates a broad ecosystem and an environment, a positive environment, that going forward, the trade with EU would see an uptick. We are very strong in EU. We have been exporting for the last 30 years. We have a plant in Germany. So I believe that in the long run, this thing, the FTA, would help us in sustaining the growth of our exports, which, as I just shared, have grown by 45% over nine months. And I expect that, we should be able to cross INR 1,000 crore, maybe close to INR 1,100 crore, in the coming year. We're already sitting at INR 837 crore of export. On the domestic front, we, the industries which we service are seeing, robust growth, and I expect the growth to continue in the coming year also.
As well as the new verticals of 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. Parallelly, the equipment is being ordered, and we are on track to start the trial production by December 2026, January, March 2027 quarter, so that we have a full one 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 we have planned should come in sooner than later. We are sort of expanding our footprint in Pune, expansion of capacity in Pune.
We have acquired Elcome, the deal has been closed, and we expect that going forward, the defense vertical would contribute to the bottom line more and to the top line as a proportionate figure. A little lower because it will be about 5%-6% of our overall revenue. On the whole, I think it's been a very satisfying nine months on the financial parameters, performance, delivery, everything. One soft thing which we believe is of a 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, so we have qualified from bronze to gold.
Some of our customers are in platinum, so 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 detail, number crunching. But 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 this year. Thank you.
Thank you, sir. Good morning, everyone. I'll now take you through our brief financial performance for the quarter and nine months ended December 2025. I can start with the update on Elcome first. During the quarter, we consummated the deal, sometime mid of December. So for about 15, 16 days, we have been able to include or consolidate financials of P&L performance of Elcome also. Considering the same, our overall total consolidated revenue for the quarter is INR 1,274 crore, as against INR 891 crore corresponding quarter previously, last year, registering 45% growth on a year-on-year basis. Our total revenue for the nine months is approximately INR 38 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 INR 335 crore, highest ever per quarter, which has grown by 65% on a year-over-year basis. And for the nine months, it is around INR 837 crore, which is again a 45% growth year-over-year basis. Overall export business mix is approximately 25% for the entire nine-month period, which was about 22.5% for last financial year. So we can see overall export has improved by almost 50 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 export, 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-
And now, so now.
We continue to focus our efforts on our operational efficiency improvement, further to improve margin. Our operating EBITDA for the quarter stood at healthy INR 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 INR 12 crore from Elcome consolidation. So excluding Elcome, and apple to apple basis, it is INR 147 crore. Our nine-month operating EBITDA is approximately INR 370 crore, which has grown by 78% year-on-year basis, and nine-month operating EBITDA margin is approximately 11%. PBT for the quarter is of INR 138 crore, and for the nine months, it is INR 295 crore, which has grown again by 105% on a year-on-year basis. PBT margin for the nine-month period is 8.7%.
Coming to tax performance, tax for the quarter is INR 110 crore, which has again grown by 108% year-on-year. Tax margin is 8.7% for the quarter. Similarly, for the nine-month period, tax is INR 227 crore, with a 100% growth on a YoY 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 Elcome, so if we remove it to make it apples to apples, net working capital days investment is 68 days, which is five days lower than the previous quarter. So that much of efficiency we were able to bring in during the quarter. And considering the same, overall operating cash flow for the entire nine-month period is now positive for the company.
We again continue to focus on reduction of net working capital days by another, maybe three to five days over the next two to three quarters. Moving to our debt position, we have a total gross debt of INR 529 crore as on December end. As again same, we are carrying a healthy treasury balance of INR 933 crore rupees. With this, we have a net cash position of INR 404 crore as on December end. Coming to CapEx spend, we—it is all on track. We have been able to spend around INR 55 crore during the quarter, and for the entire nine months, it is approximately INR 152 . Coming to ROCE performance, ROCE for the quarter is approximately 15% 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, when we are able to include, take the full P&L benefit, full period related full benefit of Elcome. Because as of now, Elcome 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 INR 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 now we are reporting only to. SGS is already in, merged into Syrma, so there is nothing pending on that side.
Once again, we continue to focus on high priorities, operational efficiencies improvement, improving the overall working capital investment, and thereby improving the overall operating cash flow. That is all, and thank you very much. I will now hand it over to Satendra, our CEO.
Okay, thanks, Bijay. And, good morning from my side as well. We had an excellent quarter, as already summed up by Mr. Bijay 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 clients, across, all the 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. Bijay alluded to in his remarks. We have seen a utilization improvement between, quarter two to quarter three, 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 road ahead. Strategy-wise, we remain very focused. We are working. This is 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 talk about: auto, industrial, medical, railways.
We are continuing to build our capabilities. I think last week also brought in 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 believe that this is gonna be a significant impact on the way businesses are doing. It definitely will bring strong tailwinds to Indian electronics companies. And we, as 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, as I said, we grew almost 45% year-on-year.
We are looking forward to using our position there, our knowledge of the market, to ensure that we have solid growth. Last but not the least, I think we continue to be a business which is doing all the right things required for the planet, and that's reflected in our EcoVadis rating moving from bronze to gold. There is clearly way ahead. Our endeavor would be to get to platinum, but the best good part is that we are on the right track. With this, I'll turn it back to Nikhil. And thank you very much. Looking forward to exciting times together. Nikhil, over to you.
Yeah. Thank you, Satendra. Thank you, Satendra. Over to you, Ikra, for getting into the Q&A session.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and one on their touchtone 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 is from the line of Sumant Kumar from Motilal Oswal Financial Services Limited. Please go ahead.
Yeah, hi. Good morning. So my question is for consumer. We have seen a swing of 116, 116 crore in this quarter, and also in industrial, 120 crore. So, but can you talk on consumer side, what is leading this kind of growth? Because we have focused on high value, high margin business for consumer, what we have discussed earlier. That is number one. Number two, what other sub-segment is driving industrial?
So we have done approximately INR 390 crore in this quarter, while it was INR 365 crore in the previous quarter. So there is a growth of approximately INR 23 crore-INR 24 crore rupees over the last quarter. And this is again, mainly largely driven by telecom business, which we are doing the set-top boxes, GP, GPONs, IDU, ODU. That is one last thing. Additionally, the consumer sector driven ODM business, what we are doing is like, water purification and maybe, some bit of RFID tags being for end, 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. And, for this quarter, it is at about 30%, and even if I say for the whole year, it is at about 32% of the total sales. So I think we are on track. The industrial is driven by across the 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 med tech and industrial, with a co-component of automotive also, which is touching around INR 100 crore. So, 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. So, can you talk on the industrial side, what is the smart meter contribution of overall industrial in Q3? And also in IT and railways, what is the mix of railway in IT and railway in this quarter?
Okay, Vijesh.
In this IT and railways, during the quarter, we have done approximately 8-
82.
INR 82 crore. Of which railways is only INR 17 crore-INR 18 crore, and balance is IT. Similar way, in the industrial breakup, smart metering is less than INR 50 crore for the quarter year.
How much?
Around INR 50 crore.
Smart metering?
Yes, yes.
In industrial, we have a higher proportion of telecom.
In industrial exports, other applications.
Industrial has power supplies, it has exports, it has the metering.
Okay. Thank you so much.
Thank you. The next question is from the line of Sumit Sinha from Macquarie Capital. Please go ahead.
Yes, thank you. So, good performance here. So if I'm looking at your full year guidance, 30%-35% year-over-year growth requires. Fourth quarter, you're assuming, or it implies about INR 300 crore-INR 500 crore sequential growth. How can you help us get there? Because that's a pretty frequent, you know, strong year-over-year acceleration that's required. Of course, Elcome will contribute. How much is Elcome closing dependent, you know, included in guidance? And 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 positive growth. So from a - 19%, 18%, 19% to 37%, it means, implies the, the whatever the growth is. And in Q3, this 37% has grown up to 44% or 45%. Q4, going forward, we are confident that we should be able to grow sequential or our sequential target, which we did about, 1,264 crore. We should be able to grow this figure by about, 1,600+, such that we should be sitting at anything between INR 4,850 crore, INR 4,900 crore to INR 5,000 crore, that's the range. But to me, the revenue figures are very important, but more important is the EBITDA.
I think, we started off the year with a guidance of INR 400 crores of EBITDA. We're already sitting at INR 370 crores in nine months. Even if I exclude the INR 12 crores of EBITDA, which has been in consolidated, it means INR 358 crores. I'm very confident that we should be able to cross the INR 500 crore mark of EBITDA for the full year. If INR 500 we do, then it's almost like 58-odd percent increase over the previous year. And it would have a similar positive increase in the PAT. Once the PAT goes up, it will have a similar positive impact on my EPS. So I think on the finer 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 Elemaster JV in the fourth quarter. Also, Elcome related, we are expecting INR 100 crore-INR 120 crore of revenue in the quarter four. That would be included there in the
Okay. Got it. Okay, and Elcome-
I'm also expecting healthcare higher number in the next quarter, as it is always a much more year loaded business in a new year.
Got it. Okay. Thank you. No, thank you for that clarification. So seems like you're pretty high visibility into 2027 as well. Can you help us think about some of these segments and what key drivers are, and if you can bracket sort of growth rates for each of these segments, that'll be helpful. Thank you.
As I just shared that, if I see my nine-month performance or my, sort of, three-month performance, all my major verticals are growing at a pace of 30+% . 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 mild, some may grow at 35%, some may grow at 28%, but, on an overall basis, we believe that, we are in a position to deliver a 30% growth on top line and on EBITDA-
Got it
in the coming year, in the coming year, 2026, 2027.
Okay, that makes sense. Thank you very much.
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to one per participant. Should you have a follow-up question, please rejoin the queue. The next question is from the line of Sonali S. from Jefferies. Please go ahead.
Thank you for the opportunity, and many congratulations for such a wonderful result to you, Gujralji, Vijayji, and the team. My first question is, margin trajectory has been really strong this quarter. Vijayji, 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 FY 2026 versus Q3 FY 2025, I mean, consumer, autos were broadly in and around the same, you know, percentage of sales as they are right now. Keen to understand what led to this, excellent margin and, the sustainability of the same.
See, we don't, as we have all the time been saying, we don't concentrate or point on quarter-on-quarter margin. So even if you recall, my Q4 of last year was, I think it was about a 10% EBIT margin, Q4 of last year. And this time it has it is in Q3. So 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, ten percent EBITDA margin going forward. What grows 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. So in exports, we are up from INR 202 crore to INR 335 crore.
This INR 135 crores 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 three, grown 46% over corresponding period of last year. So 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 are right. The overall business mix is exactly same as it was in Q3 of FY 2025. So that is where when you see gross margin level, overall improvement is only 1% because of the better margin controls or maybe some better procurement efficiency. And the larger part of savings is coming because of the scale improvement versus Q3 of FY 2025. There's a 45% of the scale improvement, which is also helping us in the operating leverage improvement. That is where the overall EBITDA margin increase is 3.5% versus Q3 of FY 2025.
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 INR 15 billion. How should we look at the per annum CapEx guidance, considering that, you know, we'll be doing this CapEx in phases? So is about INR 3 billion per annum a fair number to go by in FY 2026, 2027?
Okay. So in the first phase, which would be completed by December 2026 for 2026-2027, we should be spending approximately INR 360 crores, INR 370 crores or close to INR 360 crores-INR 400 crores, 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. So 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 2027 or beginning of FY 2027, 2028. 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. So this year it is about INR 360 crore-INR 400 crore, and next year, I think on the PCB for this would be approximately the same amount, and purely dependent on demand. As far as the INR 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 the starting of those projects in 2027, 2028.
Overall, the INR 1,500 crore we want to, we are planning to spend that by FY 2030 in total.
Understood. Got it. Very clear. Thank you, and all the best to you.
Thank you.
Thank you. The next question is from the line of Praveen Sahay from PL Capital. Please go ahead.
Yeah, thank you for the opportunity, and, many congratulations on a very good set of numbers. My first question is related to the export, because the last year, I can see that the U.S. contribution for the export, were on the higher side. And, now again, you know, even after, lot of fluctuation because of the tariff, you are doing very good in the export as well. So can you give some geographical indication from where you are getting, growth? As you have already highlighted, industrial contribution in the export is at the higher. And also, is that the Elcome contribution in the export is also there?
The Elcome is all domestic consumption, domestic sales, so it is not included in the export. The export, which for the nine months stand at INR 837 crore, versus last full year export of about 858 over 60 crore. These exports have primarily been driven by my robust growth in the industrial exports and also MedTech and healthcare. Healthcare is predominantly to USA, and others are primarily to EU.
Breakup-wise, do you have the breakup?
Yes. So breakup-wise, during the quarter, we have done almost INR 103 crore on the healthcare side, and about INR 178 crore on the industrial side, out of the total INR 3 billion.
Geographical also, if you can give?
Sorry?
Geographical bifurcation, if you can give for nine months?
5% is U.S. and 35% is Europe, but industrial is largely 90% is Europe.
So my med tech business is predominantly going to the U.S., USA. My RFID and EMS business is directed toward EU and maybe Mexico, and something to that. Geography-wise, I don't have the figures offhand. We'll have to sort of work out. But I think it should be maybe 55-45, but I have to work on the figures.
All right, sir. Any number on PLI for a quarter and nine months, if you can share?
PLI annualized number for any year is near about INR 30 crore-INR 32 crore for us that way. That's what is coming in the normal business year.
There are no abnormal variations quarter-over-quarter?
Yes.
Okay. Thank you, sir, and all the best.
Thank you. The next question is from the line of Tanay Shah from DAM Capital. Please go ahead.
Hi, sir. Good morning. Congratulations on a very good set of numbers. So my first question is, if you could possibly spend, you know, just a couple of minutes on all the new initiatives, especially the defense acquisition, since it's, you know, consummated in our numbers. And, you know, if you can just give some direction on where we want to take this business in terms of revenues, you know, how it's going to sort of be accretive to our margin profile, and, you know, what sort of return ratios does it enjoy? So one is on defense, and second is, you know, if you can possibly just for the bare PCB project indicate what kind of applications, you know, we are sort of aiming at.
Will it be more industrial, auto, you know, what are the segments which you're looking at? And what would the indicative margin profile be, on basis of current projections, for the bare PCB plant? Yeah. Thank you.
Okay. Now, Elcome, we just acquired it, and, this year, we believe that it'll account for approximately, maybe about, Elcome as an entity, I'm not talking of what it will be consolidated into because of the previous, nine months, which were not done. Elcome should be delivering anything between INR 280-300 crore of revenue. Elcome as an entity, the entire thing will not get consolidated line wise, it will not get consolidated into our, things. Going forward, we expect that the business has the potential to grow, at a maybe 10, 15, 20% with the present offering of, bouquets of, products which we have got.
But obviously, when we have acquired a platform and we have got a foot in the door in defense application, we would like to increase the bouquet of offerings. Next year, I think if we are doing about INR 280 crore-INR 300 crore this year in Elcome, next year, we should be taking it anything between a 10%-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 Elcome is concerned.
On PCB front, we are in touch with customers in the industrial, automotive, and consumer segment. Industrial is a very wide application, and energy metering is one of them. Broadly, in the PCBA industry, the margin profile is 15%-17% EBITDA margin profile without the PLI. So 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. So we'll be catering to the entire sort of consumption, what you call the PCB, which goes into the automotive. And subsequently, we would also be targeting the MedTech.
They are higher PCBAs and have a longer approval cycle, so we'll be plucking the low-hanging fruits in the initial phase, and finally build up the ecosystem and the pipeline to target the high-end PCBAs, which would also include exploring export markets.
Follow up on the PCB,
Sorry to interrupt, Tanay. Can you please speak a little louder?
Yeah. So just to follow up on the PCB business, right? You know, we've spoken about multi-layers, but what, what kind of multi-layers are we going to do? Till what amount of-
See, typically, if we analyze the PCB consumption, about 10%-15% is HDI and other things and rest is all single and multi-layer. And if we further drill down, bulk of the consumption, which I say, if I take the total pie as 100, 75% of that, 70%-75% of that would be sub-8 layer. Single to sub-8 layer or eight layers. Then as you go up in the layer profile from eight to 10 to 15 or whatever, it's like oxygen, it gets very fine, the quantities keep reducing. So we are targeting the market which is available, which is bulk market, and not saying that we'll not be targeting the, 15-layer or 12-layer. There, the volumes are very less.
Fair point, sir. Fair point. Fair point. Thank you, sir. Thank you so much for your clarification. Thank you.
Thank you. The next question is from the line of Naushad Chaudhary from Aditya Birla Mutual Fund. Please go ahead.
Hi, just one clarification, sir. Apologies if I'm repeating. I joined a bit late. Did you share your order book number? Like, can you reshare it if you have already shared?
Order book?
Yes.
Yes, yeah.
We have already shared. Total order book and visibility is approximately INR 6,400 crore, and out of that, around 31% is from export auto segment, about 25% from consumer segment, and approximately 27% from industrial segment. Balance is healthcare, IT, and railways.
Export, sir?
Exports are within, say, when I say industrial, it will be exports. MedTech is all exports.
Export is about 24% there in that.
The same, in the volume visibility. The volume are 24-25% of the enhanced value. So if we are targeting, we are doing about INR 1,100 crore this year. So next year we expect this figure to go up further. If we are targeting a 30% growth rate, so we should be having a 25-30% growth rate in exports also.
Sure. Thank you. All the best.
Thank you. The next question is from the line of Manan Goyal from ICICI Securities. Please go ahead.
Hello?
Manan, your line is on. Yeah, you are audible. Please go ahead.
Yeah, Anirudh Joshi here. Just one question, after all the acquisitions M&A, what is the goodwill on the balance sheet? And how do you see the, in a way, writing off of the or amortization of the goodwill panning out over the next two, three years? And will it qualify for any tax benefits? And second question, what is the CapEx that we are looking at for FY 2026, sorry, FY 2027 and 2028? And lastly, what is the current net working capital, inventory days or debtor days, if you can share? Yeah, 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, and 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 allocation, that intangibles will be eligible for a tax benefit, amortization and tax benefit. Goodwill is something we will not be able to amortize it, so there will not be any tax benefit or premium impact of the same thing. But 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 INR 80 crore-INR 100 crore on a year-on-year basis.
Apart from that, special project, just like PCB business related, near about INR 300 crore-INR 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 requirements, we are already at 76 days of working capital. That is also including Elcome related working capital number so far. We are still working on it and trying to reduce it further. Over probably next 2-3 quarters, we should be able to build in an efficiency of around 5-6 days. We have already disclosed that the 76 days, if we exclude Elcome on the current year number, or excluding Elcome, this is about 60-80. That's where we are currently.
So it takes a five-day or six-day reduction from September 2023 and a four-day increase from last year, corresponding period.
Even after considering all these things, my overall nine-month 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. And many thanks for the detail.
Thank you.
Thank you. The next question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Hi, thank you for the opportunity. Sir, I remember your smart meter revenue, which was INR 50 crore each quarter, which was coming, and this quarter also you highlighted it is INR 50 crore, so totaling INR 150 crore in nine months. But your guidance for this year was INR 300 crore. Really, you indicated possibly H2 would be better on smart meter front. So 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, and we don't want to land into a situation where we have the sales but not the recovery, to be very honest. So, 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, what you call, energy metering business. Hence this sort of slight softness in the growth and numbers of the value of the energy meters. In terms of quantities, we are growing 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.
So while my quantitative numbers may go up, then, since the material is being, sort of, procured by the customer, it does have an impact on the value of sales. So there are two, three factors. A, the working capital cycle, we are choosy about the customers we service. If I'm not going to be choosy, the, the, sales, 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. Got it. So what is the revised guidance of smart meter revenue for this and next year?
Next year, I think, if we are doing about INR 200 crore this year, we should be growing about another 20%, 25%, 30% next year. Again, what I'm sort of focused on, the company is focused on, is overall growth with profitable margins and positive cash flow. So these are the three parameters. So if we find that the growth is not coming, then go into the sort of sticky business, or sort of a sticky thing where the cash flow cycles are long. But 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, Elcome 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, INR 324 crore EBITDA, INR 3,700 crore odd of revenue, so it will be apple to apple, and, the growth of, Elcome will be in addition. Next year, since Elcome comes into our fold, we would share the different verticals separately, but then the growth overall, would be, blended of all the things. So if we are able to do about INR 5,000 crore, INR 4,900 crore of revenue this year, a 30% growth will be what, would result in two.
More importantly, if we deliver INR 500 crore EBITDA, of which I'm very confident, it's not if we'll deliver INR 500 crore EBITDA this year, next year, a 30% growth rate is INR 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 nine months, we did total export of approximately INR 835 crore, of which near about 255 is to U.S., and balance INR 580 crore is for other than other markets other than U.S., which includes Belgium, Germany, Mexico, Canada, and China, and Singapore together.
Thank you. The next question is on the line of Dhrumil Wani from Girik Capital. Please go ahead.
Yeah, hi, Dhrumil Wani. Thank you for the opportunity. Great performance, and good luck for the future. Sir, my only question is regarding the good drop in the finance cost quarter-on-quarter, while the debt number is higher. So 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, so this is something for during the quarter, the debt number was actually lower, and yes, we were able to negotiate or renegotiate some of the interest costs with the bankers to achieve some efficiency. So it is a result of both the things.
Okay, got it. And, Bijay, bhai, the other question is, on the, what tax should we assume, tax rate, for fourth quarter and next year? Plus, you mentioned the total cash outflow from our balance sheet will be around INR 400 crore for CapEx, like 300 for the PCB plus 100 for our existing business. So, so then next year, we're planning to meet this entire requirement with our operating cash flow or how it's going to be funded? So what sort of debt will on 31st March 2027, how the balance sheet will look like?
So of this CapEx, whatever PCB is related CapEx, we are planning to raise 50% debt, 50% through equity, and part of that equity, 25% of that equity requirement will also be funded by my partner also. So in totality, yes, including debt or equity outflow, whichever way we can say, CapEx related near about INR 300 crores-INR 350 crores will be the overall outflow here on the CapEx side. And, what was your first question regarding the cash balance?
No, yeah. So, so on this CapEx, so, INR 300 crore, so from our balance sheet, INR 300 crore will go, from Syrma balance sheet?
Yes. See, on the CapEx for the PCB, INR 350 crore-INR 400 crore, whatever is the figure by March 2027, will be making us eligible for a 50% subsidy from the Government of Andhra Pradesh. So it is sort of a bridge financing over a period of one year. So with whatever I spend till March 2027, I expect to get the money in 2027, 2028, 50% of that. So on a full sort of cycle basis, my investment in the PCB project would, for this phase, if it is INR 400 crore, will be actually INR 200 crore from Syrma SGS. And out of that INR 200 crore, whatever is the equity portion, 25% will be funded by my collaborator.
Okay. I understand. I understand. And 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, so would be somewhere around 23%, 23%-24%, and next year we can assume over 26%.
26%. Ah, got it, got it. Okay, thank you.
Thank you.
Thank you. Ladies and gentlemen, due to time constraints, that was the last question for today. I now hand the conference over to Mr. J.S. Gujral for closing comments. Over to you, sir.
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 on way, sort of on right track for that. In between, there would be bumps, but on a long-term basis, I think we are 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 an organization which is now almost there. The capability building is an ongoing exercise, which would continue year-on-year.
When I say capability building, it is introducing the best of the software, the best of the tools, online monitoring of performance of the machine, 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 a sort of access to online monitoring of my SMT lines across plants. So 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. And if we have, say, 40 lines and 500 hours 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. So 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 1.75%, my EBITDA margins have improved by almost like 3%. The remaining 1.5% has come in from the operational efficiencies, and we continue relentlessly to work on this. So 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. 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 key parts under the ECMS policy, I think positions Syrma SGS in a very, very strong position to capitalize on the emerging opportunities within India and outside India. So overall, a satisfactory nine months, globally also, macro also and micro also. And 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. So these three are the cornerstones on which we measure our performance, and each one of them has its own importance. And I now hand over to Satendra to get his view on the overall thing. Satendra, over to you.
Thank you, Gujral . I think this was a great call from all of us. We are very excited about the growth we have reported, and we are looking forward to great future. Thank you everyone. Have a good rest of the day.
Thank you very much. On behalf of Axis Capital Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.