JPMorgan Forecasts Strong Growth in India's Electronic Manufacturing Services Sector

JPMorgan Forecasts Strong Growth in India's Electronic Manufacturing Services Sector

JPMorgan initiates coverage on six EMS stocks, rating Syrma, Dixon, and Kaynes 'Overweight', Amber and Cyient DLM 'Neutral', and Avalon 'Underweight'. The EMS sector is expected to sustain strong growth, with revenue projected to grow at a 32% CAGR over FY25-30, driven by rising electronics content, the 'Make in India' initiative, and a global supply chain shift towards India. JPMorgan forecasts a 31% CAGR for Syrma and a 38% CAGR for Dixon over FY25-28.

Global brokerage firm JPMorgan has initiated coverage on six electronic manufacturing services (EMS) stocks, with varying ratings. The firm has assigned 'Overweight' ratings to Syrma SGS Technology, Dixon Technologies, and Kaynes Technology, while Amber Enterprises and Cyient DLM received 'Neutral' ratings, and Avalon Technologies was rated 'Underweight' [1][2][3][4].

JPMorgan expects the EMS sector to sustain strong growth, projecting a 32% compound annual growth rate (CAGR) over FY25-30. This growth is driven by rising electronics content, the 'Make in India' initiative, and a global supply chain shift towards India [1][2][3][4].

Syrma SGS Technology was highlighted as the third-fastest growing company in JPMorgan's EMS coverage universe, with a projected 31% CAGR in revenue over FY25-28. The brokerage anticipates a 70 basis point improvement in EBITDA margins to 9% by FY28, driven by strong demand in the industrial and automotive segments and easing margin pressures in the consumer electronics segment. A recovery in exports from FY27 is also expected, which JPMorgan believes is not fully priced in by the market, offering potential for earnings upgrades [1][2][3].

Dixon Technologies received an 'Overweight' rating as well. JPMorgan expects a 38% revenue CAGR over FY25 with stable margins. The company is expected to benefit from a ramp-up in mobile manufacturing, bolstered by a growing order book from its anchor customer and the upcoming Vivo joint venture, which is scheduled to begin operations in Q4 FY26. The brokerage highlighted a total addressable market of 140 million mobile units — 90 million already outsourced and 50 million currently in-house but likely to shift — compared to Dixon’s internal target of 60 to 65 million units by FY27 [1][2][3].

Kaynes Technology is set to lead the pack in terms of growth, with JPMorgan forecasting a 46% revenue CAGR between FY25 and FY28. The company is targeting USD 1 billion in revenue by FY28, making it the fastest-growing EMS firm in the brokerage’s coverage universe

While the EMS sector has already rallied nearly three times in the past three years, JPMorgan cautioned that further gains will hinge on upward revisions in earnings estimates. Syrma SGS Technology and Dixon Technologies were named as the brokerage's top candidates for such potential upgrades


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