Syrma SGS Technology hits an all-time today; here’s why

Syrma SGS Technology Limited has surged today and is up by 5% today after it reported that it successfully completed the acquisition of Johari Digital Healthcare Limited (JDHL). On August 1, 2023, the company reported to exchanges that it had acquired a majority stake of 51% in JDHL, a renowned design-led manufacturer of electro-medical devices. The acquisition was valued at Rs 229.5 crore. JDHL is recognized for its comprehensive range of electro-medical devices, specializing in therapeutic areas like aesthetics, diagnostics, physiotherapy, and life sciences.

The acquisition aligns with Syrma SGS’s strategic goals, positioning the company to excel in the dynamic electro-medical devices sector. Key highlights of the acquisition include JDHL’s status as an FDA/MDSAP-approved facility with multiple FDA-approved products. It also boasts end-to-end design capabilities, offering complete box-build solutions across various products and customer segments.

With a track record of high customer retention and increasing wallet share, JDHL’s financial performance for the year ended March 31, 2023, underscores its profitability and market strength. The company reported a turnover of Rs 162.8 crore, EBITDA of Rs 58 crore, net profit of Rs 43.5 crore and a net worth of Rs 104.5 crore.

Today the scrip opened at Rs 540.05 and currently, it is trading at Rs 563.20, up by 4.72%. The company has a market capitalization of around Rs 9,950 crore. Today it has hit an all-time high at Rs 587.90 and it has 52 52-week low of Rs 248.30. Over the past month shares of the company have given returns of 20.94% and over the past six months it has given multibagger returns of 105.40%.

This strategic move by Syrma SGS is driven by several factors, including the desire to enter the large, fast-growing, and fragmented medical devices segment. The acquisition is anticipated to be revenue and margin accretive from the first year of consummation, adding significant value to the company’s operations.

The transaction not only expands Syrma SGS’s portfolio but also enhances its competitive position in the electro-medical devices industry. The company expects this acquisition to bolster its earnings and cash flow, creating synergies that will drive future growth and success in this specialized sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.