Rs 4.4 Lakh crore opportunity: Emkay sees 40% growth for India’s EMS giants – Syrma, Dixon, Kaynes in focus

EMS companies are seen benefiting from deepening manufacturing capabilities backed by government capital subsidies,  increasing domestic value addition, improving cost structure through domestic sourcing and substituting imports to grow domestically.

Moreover, the report sees opportunities for unlocking exports and growing the national share in global electronics trade to 6-7% by 2030 from 1% currently. 

India’s electronics manufacturing shifts from assembly to components 

For over a decade, India’s electronics industry grew mainly by assembling finished products, especially mobile phones. Production rose from Rs 1.9 lakh crore in 2014-15 to Rs 13.1 lakh crore in 2025-26. Exports rose from Rs 38,200 crore to Rs 4.2 lakh crore in the same period, the report noted.

Mobile phones drove most of that growth. Production of phones alone rose from Rs 18,900 crore to Rs 6.3 lakh crore. Exports rose from Rs 15,600 crore to Rs 2.6 lakh crore.

But the country still imports most of the parts that go into these products. According to the report, India imports 90 to 95% of its semiconductors. It imports 88% of its bare printed circuit boards, or PCBs. It imports more than 90% of electronic passives, and almost 100% of display modules.

The report stated India’s domestic value addition in electronics is currently 18 to 20%. The government wants to raise that to more than 35% by 2030.

Government schemes put Rs 1.7 lakh crore behind electronics and semiconductor manufacturing 

As per the report, roughly $20 billion or about Rs 1.7 lakh crore, in government support is through two schemes. One is the Electronics Components Manufacturing Scheme, or ECMS. The other is the India Semiconductor Mission 2.0.

Under ECMS, 75 projects had been approved by the end of March 2026. These involve an expected investment of Rs 61,700 crore. Projected production value is over Rs 4.4 lakh crore. The scheme is expected to create close to 65,000 direct jobs, the report noted. 

The semiconductor mission has also grown. Its outlay was raised from Rs 76,000 crore under the first phase to Rs 1,25,000 crore under ISM 2.0, approved in July 2026.

Six sectors set to drive India’s electronics manufacturing growth 

The report stated that there are six areas that could drive the demand for Indian made electronics over the coming years. 

The first is data centres. Global spending on AI data centres could reach $800 billion a year by 2028-29, the report stated. This could create a $15 to $20 billion annual opportunity for EMS companies making server boards and related equipment. Margins in this business are low, in the range of 3 to 8%, but individual AI server racks can sell for $2 to 3 million.

The second is power transmission. Countries including India, the United States, Britain and those in the European Union are all raising spending on their electricity grids. As per the brokerage firm, this could create over Rs 2 lakh crore in cumulative revenue opportunity for EMS players globally.

The third is automotive electronics. India’s automotive electronics market is expected to grow around 14% a year between 2024-25 and 2029-30, as vehicles carry more sensors, cameras and control systems, according to the report.

The fourth is railways, largely tied to Kavach, India’s indigenous train collision avoidance system. According to the brokerage firm, Kavach could require Rs 40,000 crore in spending, creating a cumulative Rs 5,000 crore EBITDA opportunity for EMS companies by 2030.

The fifth is PCB manufacturing. India currently imports close to 90% of its bare PCBs. Kaynes, Syrma SGS, Amber and SRF together plan to spend close to Rs 6,950 crore on PCB manufacturing capacity by 2028, as per the report.

The sixth is semiconductor packaging, known as OSAT, or outsourced assembly and testing. This is the process of taking finished chips and packaging them so they can be used in devices. India is only beginning to build capability here.

Apple, Samsung and global manufacturers expand electronics production in India 

As per the report, Apple’s supplier base in India grew from 14 companies in 2023 to more than 40 in 2025, overtaking Vietnam. India assembled about 55 million iPhones in 2025, up 53% from the year before. That is about a quarter of Apple’s total global output.

Samsung has doubled its smartphone manufacturing capacity at its Noida plant, from 68 million to 120 million units, backed by close to Rs 4,900 crore in investment. The company shut its last factory in China in 2020 and named India as a replacement export hub.

According to the brokerage firm, this pattern is not limited to smartphones. It points to companies in railways, aerospace, medical devices and automotive components that have also expanded or set up operations in India in the past two years.

Syrma SGS, Avalon and Kaynes: Emkay’s top electronics manufacturing picks 

Emkay has a ‘Buy’ rating on Syrma SGS, with a target price of Rs 2,050, implying 35% upside. It also rates Avalon a ‘Buy’, with a target of Rs 2,400, or 24% upside. Kaynes gets a ‘Reduce’ rating, with a target of Rs 3,300, which is 12% below its current price.

Emkay’s top pick is Syrma SGS. The brokerage points to its diversified business across sectors including consumer electronics, autos, industrials, healthcare and railways. The company posted revenue growth of 62% a year between 2020-21 and 2025-26. Emkay expects growth of 35% a year through 2030-31.

Syrma is investing close to Rs 1,530 crore in a PCB manufacturing plant in Andhra Pradesh, in partnership with South Korea’s Shinhyup Electronics. The plant is expected to start commercial production in April 2027.

Avalon is Emkay’s second pick. The company specialises in what the industry calls “box builds”, where multiple components are assembled into a complete, working system, rather than just supplying individual circuit boards. This form of work made up 60% of Avalon’s revenue in the June quarter, the highest share among its peers. Avalon has manufacturing in both India and the United States, with about 60% of its revenue coming from American clients.

Kaynes is the only one of the three to get a reduced rating. According to the brokerage firm, the company’s push into new areas, including semiconductor packaging and PCB manufacturing, has moved faster than its ability to execute. The report flagged Kaynes’s 2024 acquisition of Iskraemeco, a smart meter maker, as a particular concern. The deal has left Kaynes with an estimated Rs 1,100 crore in receivables linked to slow-moving government meter installation contracts.

Kaynes has also pushed back the start date for its PCB manufacturing plant multiple times, most recently to the second half of 2026-27, and has not signed a technology partner for the project, unlike Syrma and other rivals.

The wider picture

The government has been making similar points. “India started with the manufacturing of finished products, then moved towards modules, followed by sub-modules, and has now progressed to the manufacturing of components,” Union Minister Ashwini Vaishnaw said in March. 

Government think tank Niti Aayog has set a target of $500 billion in electronics manufacturing output by 2030, split between $350 billion in finished goods and $150 billion in components. India’s electronics exports currently stand at about $25 billion a year, or roughly 1% of global electronics trade, despite the country accounting for about 4% of global demand.