Kaynes Tech, Amber, Syrma SGS, Avalon, Cyient DLM: Q3 preview, targets for EMS stocks
PL Capital said the EMS universe is expected to deliver sales, Ebitda and profit growth of about 19.0 per cent, 17.8 per cent and 12.7 per cent year on year in Q3FY26.
- Jan 6, 2026,
- Updated Jan 6, 2026 3:39 PM IST
PL Capital on Tuesday said electronics manufacturing services companies under its coverage are expected to post moderate year-on-year revenue growth of about 19.0 per cent in Q3FY26. The brokerage attributed this to single digit growth in Amber Enterprises India Ltd 's consumer durables segment, which contributes around 70 per cent to its topline, while Kaynes Technology India Ltd, Syrma SGS Technology Ltd and Avalon Technologies are continuing to maintain strong momentum, with revenue growth estimated at about 40 per cent, 22.8 per cent and 27.0 per cent, respectively.
"As we roll forward our target prices to Mar’28E, we upward revise our targets for all the companies and upgrade our rating for Avalon to ‘Buy’ from ‘Hold’ due to correction in the stock price, while maintaining for other companies," it said.
PL Capital said margins for the EMS universe are expected to remain largely stable at around 8.9 per cent YoY, though Amber is likely to witness a sharp correction due to higher input costs, which are weighing on profitability.
Overall, profit growth for the covered EMS companies is estimated at about 12.7 per cent YoY. Looking ahead, the brokerage said it is expecting a pickup in order books across EMS companies, supported by a strategic shift towards higher margin sectors and orders, which should support margin expansion in the coming quarters.
The brokerage noted that changes in Bureau of Energy Efficiency norms for room air conditioners are leading to price increases, while the GST cut is providing a 1 per cent to 2 per cent benefit that is partially cushioning the impact. Inventory levels in the RAC segment are expected to normalise by Q4FY26.
PL Capital said the EMS universe is expected to deliver sales, Ebitda and profit growth of about 19.0 per cent, 17.8 per cent and 12.7 per cent year on year in Q3FY26, driven by robust order execution, ongoing cost rationalisation and an increasing contribution from margin accretive segments. It maintained a positive view on EMS companies, citing healthy growth prospects and a continuously expanding opportunity market.
Including Amber’s electronics segment, EMS companies under coverage are expected to report healthy revenue growth of about 28.5 per cent year on year in Q3FY26. Amber’s revenue is expected to rise around 17 per cent, although its consumer durables segment is likely to post single digit growth as the RAC segment is seeing an estimated 5 per cent year on year decline, impacted by subdued demand and an extended monsoon. Avalon is expected to grow 27.0 per cent year on year, with its mobility, industrial and clean energy segments continuing to see strong traction.
Cyient DLM’s revenue is expected to decline 13.6 per cent year on year, with Altek revenue also trending lower. Kaynes is expected to deliver around 40.0 per cent revenue growth, driven by strong performance across segments, with automotive, industrial and medical segments continuing to grow at a robust pace. Syrma’s revenue is expected to rise about 23.0 per cent year on year, with margins expanding by around 50 basis points due to an ongoing shift towards margin accretive segments and a reduced contribution from the consumer segment.
On margins, PL Capital said Cyient DLM, Kaynes and Syrma are expected to see YoY improvements, while Amber and Avalon are likely to report margin contraction. Profit growth is expected to remain healthy for Avalon, Kaynes, Cyient DLM and Syrma, supported by margin expansion, while Amber’s profit is expected to decline sharply as higher input costs and a slowdown in its consumer durables business are compressing margins.
PL Capital on Tuesday said electronics manufacturing services companies under its coverage are expected to post moderate year-on-year revenue growth of about 19.0 per cent in Q3FY26. The brokerage attributed this to single digit growth in Amber Enterprises India Ltd 's consumer durables segment, which contributes around 70 per cent to its topline, while Kaynes Technology India Ltd, Syrma SGS Technology Ltd and Avalon Technologies are continuing to maintain strong momentum, with revenue growth estimated at about 40 per cent, 22.8 per cent and 27.0 per cent, respectively.
"As we roll forward our target prices to Mar’28E, we upward revise our targets for all the companies and upgrade our rating for Avalon to ‘Buy’ from ‘Hold’ due to correction in the stock price, while maintaining for other companies," it said.
PL Capital said margins for the EMS universe are expected to remain largely stable at around 8.9 per cent YoY, though Amber is likely to witness a sharp correction due to higher input costs, which are weighing on profitability.
Overall, profit growth for the covered EMS companies is estimated at about 12.7 per cent YoY. Looking ahead, the brokerage said it is expecting a pickup in order books across EMS companies, supported by a strategic shift towards higher margin sectors and orders, which should support margin expansion in the coming quarters.
The brokerage noted that changes in Bureau of Energy Efficiency norms for room air conditioners are leading to price increases, while the GST cut is providing a 1 per cent to 2 per cent benefit that is partially cushioning the impact. Inventory levels in the RAC segment are expected to normalise by Q4FY26.
PL Capital said the EMS universe is expected to deliver sales, Ebitda and profit growth of about 19.0 per cent, 17.8 per cent and 12.7 per cent year on year in Q3FY26, driven by robust order execution, ongoing cost rationalisation and an increasing contribution from margin accretive segments. It maintained a positive view on EMS companies, citing healthy growth prospects and a continuously expanding opportunity market.
Including Amber’s electronics segment, EMS companies under coverage are expected to report healthy revenue growth of about 28.5 per cent year on year in Q3FY26. Amber’s revenue is expected to rise around 17 per cent, although its consumer durables segment is likely to post single digit growth as the RAC segment is seeing an estimated 5 per cent year on year decline, impacted by subdued demand and an extended monsoon. Avalon is expected to grow 27.0 per cent year on year, with its mobility, industrial and clean energy segments continuing to see strong traction.
Cyient DLM’s revenue is expected to decline 13.6 per cent year on year, with Altek revenue also trending lower. Kaynes is expected to deliver around 40.0 per cent revenue growth, driven by strong performance across segments, with automotive, industrial and medical segments continuing to grow at a robust pace. Syrma’s revenue is expected to rise about 23.0 per cent year on year, with margins expanding by around 50 basis points due to an ongoing shift towards margin accretive segments and a reduced contribution from the consumer segment.
On margins, PL Capital said Cyient DLM, Kaynes and Syrma are expected to see YoY improvements, while Amber and Avalon are likely to report margin contraction. Profit growth is expected to remain healthy for Avalon, Kaynes, Cyient DLM and Syrma, supported by margin expansion, while Amber’s profit is expected to decline sharply as higher input costs and a slowdown in its consumer durables business are compressing margins.