JM said focus remained on revisions to FY26 and FY27 outlook, balance-sheet comfort relative to earnings growth, execution strategies for backward integration across companies, and clarity on inorganic initiatives.
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JM Financial suggested up to 42 per cent upside targets for stocks such as Kaynes Technology India Ltd, Syrma SGS Technology Ltd and PG Electroplast Ltd.
JM Financial on Thursday said the December quarter is likely to be mixed for companies in its electronic manufacturing services (EMS) coverage. The brokerage said focus remained on revisions to FY26 and FY27 outlook, balance-sheet comfort relative to earnings growth, execution strategies for backward integration across companies, and clarity on inorganic initiatives. It suggested up to 42 per cent upside targets for stocks such as Kaynes Technology India Ltd, Syrma SGS Technology Ltd and PG Electroplast Ltd.
Dixon Technologies (India) Ltd: JM Financial is expecting Dixon Technologies to post a flat quarter, driven predominantly by muted revenues from the mobile segment amid a slowdown in sourcing by brands. The brokerage said while gross margins are improving due to a superior product mix, negative operating leverage is limiting the benefit at the Ebitda level. Ebitda margin is seen largely flat at around 3.8 per cent YoY, resulting in modest absolute Ebitda growth of about 2 per cent and profit after tax growth of around 4 per cent YoY.
Kaynes Technology India Ltd: JM Financial sees Kaynes Technology reporting a strong growth, driven by execution of its order book. Revenue is growing about 45 per cent YoY, while the margin profile is seen improving 150 basis points YoY to 15.7 per cent due to a superior revenue mix. Profit after tax in Q3 is being estimated at about Rs 98 crore, up roughly 48 per cent YoY. The brokerage said commentary on FY26 guidance, alongside clarity on the commencement of OSAT and bare PCB businesses, is remaining critical.
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Syrma SGS Technology Ltd: JM Financial expects Syrma SGS to deliver an on-track quarter, with revenue growing around 32 per cent YoY as the ramp-up in non-consumer businesses is progressing as planned. Margins, which are improving over the past few quarters, are sustaining, with Ebitda margin estimated at about 9.6 per cent, up 50 basis points YoY, it said. Profit after tax is estimated at Rs 69 crore, up around 40 per cent YoY, supported by strong operating performance, higher other income from QIP proceeds and lower finance costs. Focus is remaining on the FY26 and FY27 outlook, defence acquisitions and backward integration timelines.
Amber Enterprises Ltd: JM Financial is expecting Amber Enterprises to report 19 per cent YoY revenue growth in Q3, driven primarily by the electronics segment, which is growing about 49 per cent YoY due to PCBA ramp-up and consolidation of Unitronics from Q3. The consumer durables segment may see some relief, with revenue growing around 10 per cent YoY, supported by increased manufacturing ahead of changes in energy rating norms. Ebitda margin is seen declining marginally by 20 basis points, while absolute Ebitda is seen growing at 14 per cent YoY. Higher finance costs and depreciation are seen keeping profit growth subdued.
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PG Electroplast Ltd: JM Financial is expecting PG Electroplast to lead the contract manufacturing segment, with Q3 revenue growing around 35 per cent YoY, driven by a rebound in its room air-conditioner business. The brokerage is attributing this to customer stocking ahead of the upcoming season and accelerated manufacturing before changes in BEE norms. Ebitda margin is standing at about 9 per cent, while absolute Ebitda is growing around 39 per cent YoY. Focus is remaining on updates related to compressor initiatives, discussions with the technology partner, commencement of mass production and order-book visibility for summer 2026.
Cyient DLM Ltd: JM Financial is expecting Cyient DLM to report a weak quarter, with revenue declining 27 per cent YoY on a strong base. However, an improved revenue mix is seen driving a margin improvement of 140 basis points YoY to around 9.5 per cent, even as absolute Ebitda is seen declining 15 per cent. Profit after tax is estimated at about Rs 12 crore, down roughly 29 per cent YoY. At the same time, the brokerage is expecting improved order inflows, which are addressing concerns around the order book.
Avalon Technologies Ltd: JM Financial expects Avalon Technologies to continue reporting strong revenue growth, with top line rising around 35 per cent YoY in Q3. However, margins are seen moderating to 9.7 per cent due to a high base, compared with 10.1 per cent quarter on quarter and 12.3 per cent YoY. Profit after tax is estimated at about Rs 22 crore. JM Financial is upgrading the stock to REDUCE from SELL due to a roll-forward in its valuation horizon, while maintaining that valuations remain demanding relative to the growth profile.
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Target prices for Kaynes Tech, Dixon Tech & other EMS stocks
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
JM Financial on Thursday said the December quarter is likely to be mixed for companies in its electronic manufacturing services (EMS) coverage. The brokerage said focus remained on revisions to FY26 and FY27 outlook, balance-sheet comfort relative to earnings growth, execution strategies for backward integration across companies, and clarity on inorganic initiatives. It suggested up to 42 per cent upside targets for stocks such as Kaynes Technology India Ltd, Syrma SGS Technology Ltd and PG Electroplast Ltd.
Dixon Technologies (India) Ltd: JM Financial is expecting Dixon Technologies to post a flat quarter, driven predominantly by muted revenues from the mobile segment amid a slowdown in sourcing by brands. The brokerage said while gross margins are improving due to a superior product mix, negative operating leverage is limiting the benefit at the Ebitda level. Ebitda margin is seen largely flat at around 3.8 per cent YoY, resulting in modest absolute Ebitda growth of about 2 per cent and profit after tax growth of around 4 per cent YoY.
Kaynes Technology India Ltd: JM Financial sees Kaynes Technology reporting a strong growth, driven by execution of its order book. Revenue is growing about 45 per cent YoY, while the margin profile is seen improving 150 basis points YoY to 15.7 per cent due to a superior revenue mix. Profit after tax in Q3 is being estimated at about Rs 98 crore, up roughly 48 per cent YoY. The brokerage said commentary on FY26 guidance, alongside clarity on the commencement of OSAT and bare PCB businesses, is remaining critical.
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Syrma SGS Technology Ltd: JM Financial expects Syrma SGS to deliver an on-track quarter, with revenue growing around 32 per cent YoY as the ramp-up in non-consumer businesses is progressing as planned. Margins, which are improving over the past few quarters, are sustaining, with Ebitda margin estimated at about 9.6 per cent, up 50 basis points YoY, it said. Profit after tax is estimated at Rs 69 crore, up around 40 per cent YoY, supported by strong operating performance, higher other income from QIP proceeds and lower finance costs. Focus is remaining on the FY26 and FY27 outlook, defence acquisitions and backward integration timelines.
Amber Enterprises Ltd: JM Financial is expecting Amber Enterprises to report 19 per cent YoY revenue growth in Q3, driven primarily by the electronics segment, which is growing about 49 per cent YoY due to PCBA ramp-up and consolidation of Unitronics from Q3. The consumer durables segment may see some relief, with revenue growing around 10 per cent YoY, supported by increased manufacturing ahead of changes in energy rating norms. Ebitda margin is seen declining marginally by 20 basis points, while absolute Ebitda is seen growing at 14 per cent YoY. Higher finance costs and depreciation are seen keeping profit growth subdued.
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PG Electroplast Ltd: JM Financial is expecting PG Electroplast to lead the contract manufacturing segment, with Q3 revenue growing around 35 per cent YoY, driven by a rebound in its room air-conditioner business. The brokerage is attributing this to customer stocking ahead of the upcoming season and accelerated manufacturing before changes in BEE norms. Ebitda margin is standing at about 9 per cent, while absolute Ebitda is growing around 39 per cent YoY. Focus is remaining on updates related to compressor initiatives, discussions with the technology partner, commencement of mass production and order-book visibility for summer 2026.
Cyient DLM Ltd: JM Financial is expecting Cyient DLM to report a weak quarter, with revenue declining 27 per cent YoY on a strong base. However, an improved revenue mix is seen driving a margin improvement of 140 basis points YoY to around 9.5 per cent, even as absolute Ebitda is seen declining 15 per cent. Profit after tax is estimated at about Rs 12 crore, down roughly 29 per cent YoY. At the same time, the brokerage is expecting improved order inflows, which are addressing concerns around the order book.
Avalon Technologies Ltd: JM Financial expects Avalon Technologies to continue reporting strong revenue growth, with top line rising around 35 per cent YoY in Q3. However, margins are seen moderating to 9.7 per cent due to a high base, compared with 10.1 per cent quarter on quarter and 12.3 per cent YoY. Profit after tax is estimated at about Rs 22 crore. JM Financial is upgrading the stock to REDUCE from SELL due to a roll-forward in its valuation horizon, while maintaining that valuations remain demanding relative to the growth profile.
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Target prices for Kaynes Tech, Dixon Tech & other EMS stocks
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
