The ‘next Dixon’? This midcap is playing a smarter, higher-margin game.\n\nSyrma SGS Technology is carving out a niche in India’s EMS space with a focus on design-led, high-margin, export-driven manufacturing. Unlike Dixon Technologies, Syrma avoids commoditised segments and instead targets industrial, auto, and medical electronics. While its FY25 margins and export growth impress, premium valuations demand stronger capital efficiency and consistent execution. It may not be the next Dixon, but that’s precisely what makes it interesting. \n\nIn India’s electronics manufacturing world, Dixon Technologies is the benchmark. With a Rs 38,000 crore topline and a PLI-fuelled scale-up strategy, Dixon embodies the “India manufacturing” bull case.\n\nBut when the markets get crowded at the top, the more interesting opportunities often lie a few rows below.\n\nSyrma SGS Technology, an approx Rs 4,000 crore midcap Electronics Manufacturing Services (EMS) firm, is one such story. Syrma is trying to become India’s go-to partner for complex, design-integrated, export-friendly electronics manufacturing. And it’s getting there, piece by piece.\n\nA diffrent EMS model – Margins over mass\n\nDixon is built on scale. It produces smartphones, TVs and washing machines. Contracts are massive, margins are razor-thin and success is measured in units per day.\n\nSyrma plays a different game. It focusses on printed circuit board assemblies (PCBAs), RFID modules, sensor-based products, industrial systems and medical electronics. Items in these categories are often produced in smaller batches, but with greater complexity. These are low-volume, high-margin products.\n\nIn fact, Syrma was one of the first movers in RFID product manufacturing in India and holds a leadership position there. That gives it a solid base in the consumer electronics vertical, even though that vertical is now being deliberately pruned.\n\nNot because it couldn’t scale, but because it chose to prioritise value over volume. Consumer categories, while large, are highly commoditised and margin-dilutive. By shifting toward industrial, automotive and healthcare electronics, Syrma is repositioning itself for higher margins, longer-term contracts and more defensible growth.\n\nA high-margin mindset\n\nDixon’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin for FY25 stood at 3.8%. Syrma’s? A much healthier 8.6%.\n\nIn Q1FY26, it touched 10.3%, while FY26 guidance stands at 8.5–9.5%. This isn’t a fluke.\n\nSyrma’s business model is shifting from plain-vanilla EMS to partial product design. And that’s a game-changer.\n\nWhen a player designs the product, from PCB layout to firmware, it gains more control, more pricing power and more room to innovate. This improves both stickiness and profitability.\n\nSector mix tilts toward resilience\n\nSyrma’s business mix has undergone a deliberate shift over the years. From a consumer-heavy EMS profile to one that’s far more balanced and future-ready.\n\nIn FY25, the revenue breakdown stood at:\n\nConsumer electronics: 35% Industrial: 29% Automotive: 22% Railways & IT: 7% Healthcare: 8% \n\nThis is a marked change from FY22, when consumer electronics made up more than half of Syrma’s revenues. That segment has steadily shrunk to 35% as the company consciously steers away from low-margin, high-volume products.\n\nAt the same time, industrial has become the company’s largest vertical. Automotive now contributes 22% (up 26% YoY in FY25) and healthcare electronics has grown 15% year-on-year.\n\nApart from being higher-margin categories, they are also more export-friendly, less seasonal and offer longer visibility.\n\nUnlike Dixon, which leans heavily on mobile phones and white goods, Syrma is building a portfolio that’s less prone to pricing pressure and volume volatility. It’s a shift from chasing scale to prioritising stability, complexity and capital discipline.\n\nWhy does this matter? These sectors are higher-margin, less seasonal and offer more scope for export-oriented contracts. Unlike Dixon, Syrma is not overly reliant on commoditised white goods or mobile phones.\n\nExports, not just for show\n\nDixon may still be largely domestic. Syrma isn’t.\n\nExports now form a meaningful chunk of Syrma’s business, 30% of revenues in FY23, up from just 20% in FY21. And the momentum is only picking up. Export revenue surged 54% year-on-year in FY25 to Rs 873 crore. Management expects this to cross Rs 1,000 crore in FY26.\n\nBut this isn’t just a case of riding the China+1 wave. Syrma works with global OEMs across Japan, the US and Europe. It even owns a facility in Germany, which not only adds credibility but also offers logistical access to the EU market.\n\nThis is structured, institutional demand. For Syrma, global markets aren’t just a hedge, they’re a core part of the strategy.\n\nCapital discipline matters\n\nUnlike some of its PLI-chasing peers, Syrma isn’t building mega factories for headlines.\n\nIn FY25, it spent Rs 180 crore to expand capacity in Pune, Chennai and Bawal. Pune is now operational. Brownfield expansion continues.\n\nAnd it’s managing this growth without stretching the balance sheet. Net debt stands at Rs 264 crore; treasury assets at Rs 347 crore. FY25 operating cash flow was Rs 176 crore. Working capital cycle is 69 days (target: 65). Asset turnover: 5.5x. Return on Capital Employed (ROCE): 16%.\n\nSo what’s the downside?\n\nAt 66x PE, Syrma is priced like a proven midcap compounder. That might be fine if it were already delivering on every front. Dixon, by comparison, trades at 100x PE but has scale, brand and more aggressive topline growth.\n\nFor Syrma, margin strength alone won’t justify this premium unless revenue growth remains strong and capital returns improve.\n\nMoreover, Syrma’s export growth is impressive. But global demand is cyclical. Currency swings, geopolitical tensions, or customer concentration could derail momentum.\n\nAt 16%, ROCE is decent for a growing company but Dixon is at nearly 48.5%. Syrma’s recent capex could help improve this, but it will need to demonstrate clear returns soon. Otherwise, premium valuations will be tough to justify.\n\nThe Verdict: Not Dixon 2.0 and maybe that’s a good thing\n\nSyrma SGS doesn’t want to be the next Dixon. And that might be the smartest thing about it.\n\nIt’s not chasing mobiles. It’s not banking on subsidies. It’s not in the volume race.\n\nInstead, it’s building an export-heavy, high-margin, design-influenced platform. It’s focussing on medical, industrial and auto electronics where the stakes are higher and so are the rewards.\n\nIf it delivers on its FY26 guidance of Rs 5,000+ crore in revenue, 30–35% growth, 7-8% EBITDA margins, the re-rating argument gets stronger. The PE gap with Dixon is already narrowing.

The 'next Dixon'? This midcap is playing a smarter, higher-margin game.

Syrma SGS Technology, a midcap Electronics Manufacturing Services (EMS) firm in India, is repositioning itself as a high-margin, export-driven player in industrial, automotive, and medical electronics, contrasting with Dixon Technologies' scale-focused approach. The article highlights Syrma's financial strength, export growth, and strategic shift toward complex, design-integrated manufacturing, while cautioning against overvalued premiums compared to Dixon.