Dixon, Kaynes, Amber, Avalon, Syrma SGS, Cyient DLM, Data Patterns: Share price targets

MOFSL in a fresh note on Electronics Manufacturing Services (EMS) said the sector continues to benefit from strong order inflows across high-margin segments such as defence, aerospace, automotive, telecom, and clean
energy, with aggregate order books growing 25 per cent YoY in FY26 to Rs 20,500 crore.

While EMS companies faced cost pressures from higher prices of memory, commodities, labour, and logistics, the impact has largely been mitigated through pass-through mechanisms and operational efficiencies, MOFSL said.

The domestic brokerage retained its 'Buy' ratings on Kaynes Technology India Ltd, Avalon Technologies Ltd, Cyient DLM, Syrma SGS Technology, Dixon Technologies (India) Ltd, and Amber Enterprises India Ltd. MOFSL suggested a 'Neutral' rating on Data Patterns. 

MOFSL estimated a 31 per cent compounded annual growth rate (CAGR) for its EMS coverage companies over FY26-28, aided by robust order flows, healthy demand, capacity additions, ramp-up of existing and new plants, and the development of new products across key industry verticals.

MOFSL said capacity expansions are underway across leading memory manufacturers. But surging demand from AI infrastructure, agentic AI applications, and server deployments should outstrip incremental supply additions, resulting in sustained supply tightness and supportive memory pricing over the next several years. Consequently, global demand for memory chips is expected to be 1.5 times higher than supply. The impact on EMS companies appears to be manageable given their limited memory exposure and/or ability to pass on higher costs to customers, MOFSL said.

The sector typically benefits from contractual pass-through arrangements and cost-plus pricing structures.

"While there may be short-term timing mismatches that create temporary margin pressure, EMS players mitigate these headwinds through procurement efficiencies, scale-led supplier negotiations, operational improvements, and supply-chain optimization," MOFSL said.

Strong and diversified order inflows across key sectors position EMS companies well for stable growth in FY27, with robust execution visibility, MOFSL added.