Dixon, Amber, Kaynes, Syrma SGS: Top EMS stock to play multi-year upcycle; target price
Top stock to buy: As backward integration gains traction, India’s EMS sector is positioned for faster growth, supported by improving cost efficiency and a structurally rising export contribution.
- Apr 7, 2026,
- Updated Apr 7, 2026 12:48 PM IST
HDFC Institutional Equities in a fresh note on Tuesday said India's Electronics Manufacturing Services (EMS) sector is scaling into a multi‑year upcycle, thanks to PLI incentives, China-plus-one-led supply chain diversification, rising domestic electronics demand, increasing labour costs in competing regions, and a growing preference among global OEMs for outsourced manufacturing.
As backward integration gains traction, the brokerage said, India’s EMS sector is positioned for faster growth, supported by improving cost efficiency and a structurally rising export contribution. Syrma SGS Technology Ltd is the brokerage's top pick in the sector. It also liked Dixon Technologies (India) Ltd (Dixon Tech) and Amber Enterprises India Ltd. The brokerage has 'Reduce' rating on Kaynes Technology India Ltd.
Syrma SGS Technology HDFC Institutional Equities said it liked Syrma for its strong growth visibility, diversified client and segment base, expanding value-added mix and robust balance sheet. It modelled revenue, Ebitda and adjusted PAT growth of 29 per cent, 38 per cent and 44 per cent, respectively, over FY26–28E. The brokerage maintained its 'Buy' rating on the stock with an unchanged target price of Rs 920 per share, based on its DCF valuation.
HDFC Institutional Equities said Syrma SGS stood out as one of India’s key EMS players, with core capabilities spanning PCBA, box-build solutions and RFID-based products. The company delivered strong growth, with revenues quadrupling from Rs 900 crore in FY20 to Rs 3,800 crore in FY25, translating into a 34 per cent CAGR. The brokerage noted that Syrma benefits from a strong export footprint, with presence across more than 20 countries and exports contributing 23 per cent of revenues in FY25. Over recent years, the company undertook multiple inorganic acquisitions to strengthen capabilities across high-growth segments.
Additionally, Syrma is setting up a PCB manufacturing facility through a joint venture with South Korea-based Shinhyup Electronics under the ECMS scheme, further deepening its participation across the electronics value chain and export markets. The project entails a total capex of about Rs 1,500 crore, to be commissioned in phases by FY30, with the first phase expected to be completed by December 2026.
Dixon Tech HDFC Institutional Equities likes Dixon Tech for its strong balance sheet, lean working‑capital profile, and robust return ratios. However, near‑term challenges persist, driven by elevated memory costs, the expiry of the existing smartphone PLI scheme in March 2026 with no extension announced yet, and delays in approval of the Vivo JV, it said.
"We have modelled 25 per cent, 26 per cent and 26 per cent CAGR in revenue, Ebitda and APAT for FY26, FY27 and FY28E. We maintain our ADD rating on the stock, with a lower target price of Rs 10,740 per share, based on DCF valuation," it said.
Amber Enterprises HDFC Institutional Equities said it remained positive on Amber Enterprises, supported by its leadership in the room air conditioner market, expanding addressable opportunity, strong growth visibility, ramp-up of the margin-accretive electronics segment and a healthy balance sheet aided by lean working capital management.
The brokerage modelled revenue, Ebitda and profit growth of 24 per cent, 28 per cent and 38 per cent, respectively, over FY25–28E. It maintained its 'Buy' rating on Amber Enterprises with a lower target price of Rs 8,300 per share, based on its DCF valuation.
"We estimate cumulative capex of Rs 4,400 crore over FY26-28, largely to support PCB capacity expansion and selective inorganic acquisitions, to be funded through a mix of internal accruals and equity/preferential issuances. Notwithstanding the stepped‑up capex cycle, we expect Amber’s net debt to remain minimal, aided by robust earnings growth and equity‑led funding," HDFC Institutional Equities said.
Kaynes Tech HDFC Institutional Equities said it expects a gradual normalisation of the working capital cycle and an improvement in operating cash flow for Kaynes Tech over the coming periods. Yet, it feels working capital requirements are likely to remain structurally high. Given the capital‑intensive nature of upcoming projects, internal accruals and last year’s equity fundraising alone may not be sufficient to fully meet cash flow requirements, potentially leading to higher leverage and dilution in return on capital employed, it said,
"We have modeled revenue, Ebitda, and APAT CAGRs of 40 per cent, 44 per cent, and 32 per cent, respectively, over FY25–28E, aided by ramp-up of OSAT and PCB facility. We maintain our Reduce rating on the stock, with a lower target price of Rs 3,810/share, based on DCF valuation," it said.
HDFC Institutional Equities in a fresh note on Tuesday said India's Electronics Manufacturing Services (EMS) sector is scaling into a multi‑year upcycle, thanks to PLI incentives, China-plus-one-led supply chain diversification, rising domestic electronics demand, increasing labour costs in competing regions, and a growing preference among global OEMs for outsourced manufacturing.
As backward integration gains traction, the brokerage said, India’s EMS sector is positioned for faster growth, supported by improving cost efficiency and a structurally rising export contribution. Syrma SGS Technology Ltd is the brokerage's top pick in the sector. It also liked Dixon Technologies (India) Ltd (Dixon Tech) and Amber Enterprises India Ltd. The brokerage has 'Reduce' rating on Kaynes Technology India Ltd.
Syrma SGS Technology HDFC Institutional Equities said it liked Syrma for its strong growth visibility, diversified client and segment base, expanding value-added mix and robust balance sheet. It modelled revenue, Ebitda and adjusted PAT growth of 29 per cent, 38 per cent and 44 per cent, respectively, over FY26–28E. The brokerage maintained its 'Buy' rating on the stock with an unchanged target price of Rs 920 per share, based on its DCF valuation.
HDFC Institutional Equities said Syrma SGS stood out as one of India’s key EMS players, with core capabilities spanning PCBA, box-build solutions and RFID-based products. The company delivered strong growth, with revenues quadrupling from Rs 900 crore in FY20 to Rs 3,800 crore in FY25, translating into a 34 per cent CAGR. The brokerage noted that Syrma benefits from a strong export footprint, with presence across more than 20 countries and exports contributing 23 per cent of revenues in FY25. Over recent years, the company undertook multiple inorganic acquisitions to strengthen capabilities across high-growth segments.
Additionally, Syrma is setting up a PCB manufacturing facility through a joint venture with South Korea-based Shinhyup Electronics under the ECMS scheme, further deepening its participation across the electronics value chain and export markets. The project entails a total capex of about Rs 1,500 crore, to be commissioned in phases by FY30, with the first phase expected to be completed by December 2026.
Dixon Tech HDFC Institutional Equities likes Dixon Tech for its strong balance sheet, lean working‑capital profile, and robust return ratios. However, near‑term challenges persist, driven by elevated memory costs, the expiry of the existing smartphone PLI scheme in March 2026 with no extension announced yet, and delays in approval of the Vivo JV, it said.
"We have modelled 25 per cent, 26 per cent and 26 per cent CAGR in revenue, Ebitda and APAT for FY26, FY27 and FY28E. We maintain our ADD rating on the stock, with a lower target price of Rs 10,740 per share, based on DCF valuation," it said.
Amber Enterprises HDFC Institutional Equities said it remained positive on Amber Enterprises, supported by its leadership in the room air conditioner market, expanding addressable opportunity, strong growth visibility, ramp-up of the margin-accretive electronics segment and a healthy balance sheet aided by lean working capital management.
The brokerage modelled revenue, Ebitda and profit growth of 24 per cent, 28 per cent and 38 per cent, respectively, over FY25–28E. It maintained its 'Buy' rating on Amber Enterprises with a lower target price of Rs 8,300 per share, based on its DCF valuation.
"We estimate cumulative capex of Rs 4,400 crore over FY26-28, largely to support PCB capacity expansion and selective inorganic acquisitions, to be funded through a mix of internal accruals and equity/preferential issuances. Notwithstanding the stepped‑up capex cycle, we expect Amber’s net debt to remain minimal, aided by robust earnings growth and equity‑led funding," HDFC Institutional Equities said.
Kaynes Tech HDFC Institutional Equities said it expects a gradual normalisation of the working capital cycle and an improvement in operating cash flow for Kaynes Tech over the coming periods. Yet, it feels working capital requirements are likely to remain structurally high. Given the capital‑intensive nature of upcoming projects, internal accruals and last year’s equity fundraising alone may not be sufficient to fully meet cash flow requirements, potentially leading to higher leverage and dilution in return on capital employed, it said,
"We have modeled revenue, Ebitda, and APAT CAGRs of 40 per cent, 44 per cent, and 32 per cent, respectively, over FY25–28E, aided by ramp-up of OSAT and PCB facility. We maintain our Reduce rating on the stock, with a lower target price of Rs 3,810/share, based on DCF valuation," it said.