Dixon vs Kaynes vs Syrma: Jefferies reveals EMS stocks gaining most from ₹39 lk cr mobile drive 

Jefferies, in its September 9 report, said India is taking a “stepwise approach for indigenisation”. The brokerage said the first phase of the mobile Production Linked Incentive (PLI) scheme succeeded in getting 99% of phones assembled in India, but domestic value addition remained limited. The next phase is being driven by the Electronics Components Manufacturing Scheme (ECMS) and the Mobile Phone Manufacturing Scheme (MPMS).

The shift has direct implications for the three electronics manufacturing services (EMS) companies covered by Jefferies. Dixon Technologies represents the assembly-led model, while Kaynes Technology and Syrma SGS Technology have greater exposure to components and backward integration. Jefferies’ preference is clear: “Prefer Component plays vs. Assembly .”

India moves from assembly to deeper manufacturing

The success of mobile PLI created the foundation for India’s electronics manufacturing industry, but the supply chain remained heavily dependent on imported components.

Jefferies said the new policy framework is intended to address that gap. ECMS, introduced in FY26, has received 249 applications, with 106 projects approved so far across five tranches. The scheme’s incentive outlay was increased by 75% to Rs 40,000 crore after industry response exceeded the initial expectations.

The structure of ECMS is also different from the earlier mobile assembly programme. It supports areas where companies need higher upfront capital, longer gestation periods and lower asset turns. Jefferies expects the scheme to support roughly 50% of the mobile phone bill of materials, with printed circuit board manufacturing emerging as a key opportunity.

The brokerage estimates the domestic PCB industry has a total addressable market of about $5 billion, while 85-90% of PCB requirements are currently imported. It expects foreign partnerships to help companies bridge technology gaps as local manufacturing expands.

MPMS adds another layer to the opportunity

The Mobile Phone Manufacturing Scheme is expected to extend the policy push beyond the assembly gains achieved under the earlier PLI programme.

Jefferies said MPMS is aimed at scaling domestic mobile production while increasing value addition, improving the supply chain and strengthening global competitiveness. The scheme has a Rs 62,500 crore budgetary outlay over five years from FY27 to FY31.

The brokerage expects cumulative mobile phone production during the scheme’s five-year tenure to reach Rs 39 lakh crore, compared with Rs 24-25 lakh crore during FY21-FY26. Higher exports are also expected.

This creates a more favourable environment for companies that can participate beyond final assembly. At the same time, the transition does not benefit every EMS company in the same way, which is where Jefferies’ Dixon-Kaynes-Syrma comparison becomes important.

Jefferies on Dixon Technologies: ‘Hold’

Dixon Technologies (India) Ltd. remains the largest and most assembly-oriented name among the three companies.

Jefferies has a ‘Hold’ rating on Dixon, with a target price of Rs 12,730, which implies roughly 10% downside based on the price disclosed in the report. The brokerage’s assessment reflects the company’s strong manufacturing scale but also the challenges associated with moving from an asset-light original equipment manufacturing model towards greater backward integration.

Jefferies said Dixon was historically focused on the asset-light original equipment manufacturing business and is now investing in backward integration. That change could create additional opportunities as component manufacturing expands, but it also means a greater capital commitment than the company’s earlier model.

The brokerage expects Dixon’s mobile and EMS sales growth to normalise to a 19% compound annual growth rate (CAGR) over FY26-FY29, compared with a much faster 104% CAGR during FY23-FY26.

Margin performance is another consideration. Jefferies expects the expiry of Mobile PLI and higher input costs, particularly memory prices for smartphones, to weigh on Dixon’s operating profit margin in FY27.

The company is nevertheless participating in the component push. Jefferies’ ECMS data shows Dixon among the beneficiaries in areas including camera modules, optical transceivers and display modules. The brokerage also noted that Dixon’s manufacturing scale gives it the ability to participate in new areas, even though its historical preference has been for lower asset intensity and faster capital turns.

Jefferies on Kaynes Technology: ‘Buy’

Kaynes Technology is Jefferies’ preferred name among the three.The brokerage has a ‘Buy’ rating on Kaynes with a target price of Rs 4,480, implying roughly 24% upside based on the price disclosed in the report.

The key attraction is Kaynes’ early investment in components. Jefferies said the company has been investing in OSAT and PCB manufacturing ahead of its peers, giving it exposure to the areas where the policy push is now becoming more focused.

Kaynes is among the companies receiving ECMS support, with approved projects covering multi-layer PCBs, high-density interconnect PCBs, copper laminate and camera modules. This gives the company exposure to several layers of the component chain rather than relying primarily on final assembly.

Jefferies expects the component expansion to support strong revenue growth. Kaynes is projected to deliver a 30% sales CAGR during FY26-FY29, substantially above the growth expected for Dixon over the same period.

The expansion does come with execution and capital requirements. Jefferies expects Kaynes’ operating margin to normalise as its OSAT manufacturing ramps up in FY28. The company has also been investing ahead of peers, increasing the importance of successful capacity utilisation and execution.

On valuation, Jefferies noted that Kaynes’ one-year forward price-to-earnings multiple had fallen materially from its October 2025 peak and was around 50 times in September 2026, below its historical average of 65 times. The brokerage’s target multiple was around 35 times, reflecting concerns around persistent working capital and weaker execution.

That combination is central to the Kaynes thesis: the valuation is still demanding, but Jefferies sees enough component-led growth and future capacity potential to retain a ‘Buy’ rating.

Jefferies on Syrma SGS Technology: ‘Hold’

Syrma SGS Technology also has meaningful exposure to the component opportunity, but Jefferies remains more cautious on the valuation.

The brokerage has a ‘Hold’ rating with a target price of Rs 1,430, implying roughly 13% downside based on the price disclosed in the report.

Syrma is moving into PCB manufacturing and has received ECMS approvals covering multi-layer PCBs, camera modules, high-density interconnect and flexible PCBs, copper laminate and coils. That gives the company direct exposure to the backward-integration theme that Jefferies favours.

Jefferies expects Syrma to deliver a 42% sales CAGR during FY26-FY29, the strongest growth rate among the three companies in its comparison. The brokerage attributes the opportunity to its foray into components and expects the expansion to accelerate revenue growth.

Its margin profile is also different. Jefferies said favourable product mix and exports supported margin expansion for Syrma in FY26. The company is therefore entering the next phase with a component-focused expansion plan and a stronger mix than in earlier years.

The constraint is valuation. Jefferies said Syrma’s one-year forward price-to-earnings multiple was around 55 times, about 50% above its historical average and ahead of several EMS peers. Its target multiple of 45 times was itself around 15% above the historical average.

That explains why the brokerage’s sector preference for components does not automatically translate into a ‘Buy’ call on Syrma.

Kaynes and Syrma have the growth advantage

The difference between the three companies becomes more apparent in Jefferies’ sales estimates.

The brokerage expects Kaynes and Syrma to deliver 30% and 42% sales annually on a compiunded basis between FY26-FY29, driven by their foray into components. Dixon, in contrast, is expected to see mobile and EMS sales growth normalise to 19% over the same period after its exceptionally strong FY23-FY26 expansion.

That does not mean Dixon loses relevance. Its manufacturing scale remains important, and it is also moving into backward integration. But Jefferies sees a more direct earnings-growth opportunity in companies already building component capabilities.

PCB manufacturing emerges as a key battleground

Printed circuit board manufacturing is one of the clearest areas where the policy change could alter the competitive structure.

Jefferies said HDI and multi-layer PCB manufacturing is a key focus of ECMS. With the domestic industry estimated at $5 billion and imports accounting for 85-90% of the market, localisation offers a substantial opportunity for companies capable of building the required manufacturing and technology base.

Kaynes and Syrma have both moved into this area, while Dixon is expanding its backward-integration efforts across other components.

The need for technology partnerships remains important. Jefferies pointed to partnerships involving Dixon and Syrma as potential ways to bridge technology gaps and accelerate domestic component capabilities.

Capex requirements will rise as component exposure expands

The move towards components also changes the financial profile of the EMS industry.

Jefferies’ analysis shows that Kaynes has been investing in components ahead of peers, while Syrma is entering PCB manufacturing. Dixon, which previously focused more heavily on an asset-light OEM model, is also increasing its investment in backward integration.

This creates a trade-off. Component manufacturing can open a larger addressable market and support faster revenue growth, but it requires higher upfront capital and comes with longer gestation periods.

ECMS itself has been designed around that reality. Jefferies said the scheme supports front-ended capital expenditure, lower asset turns and longer gestation periods, areas that had limited participation under the earlier mobile PLI programme.

Valuation separates the three companies

Jefferies’ valuation assessment also provides a sharp distinction between the three names.

Kaynes’ forward valuation has fallen considerably from its October 2025 peak, while Syrma has seen a substantial rerating after its strong six-month performance. Dixon continues to command a premium multiple, supported by prospective volume opportunities from the new mobile manufacturing scheme and Vivo PN3 approval, although Jefferies has also factored in rising memory prices.

The brokerage’s targets therefore produce very different return profiles: Kaynes offers the strongest positive gap to its target, while Dixon and Syrma trade above their respective disclosed targets.

Company	Jefferies rating	Target price	Implied upside/downside
Dixon Technologies	‘Hold’	Rs 12,730	10% downside
Kaynes Technology	‘Buy’	Rs 4,480	24% upside
Syrma SGS Technology	‘Hold’	Rs 1,430	13% downside

The implied percentages are calculated from the prices and target prices disclosed in Jefferies’ September 9 report.

Conclusion

The central message of Jefferies’ report is that India’s electronics manufacturing model is changing.

Mobile PLI established domestic assembly at scale, but the country still relied heavily on imported components. ECMS is designed to address that gap by supporting component manufacturing, while MPMS is expected to increase domestic value addition and exports.

Jefferies therefore prefers component exposure over assembly exposureThe next phase of India’s EMS industry, according to Jefferies, will be determined less by how much electronics India assembles and more by how much of the underlying value chain it can manufacture domestically.

Disclaimer: This article is based on Jefferies’ EMS: Backward Integration at Center Stage report. The ratings and target prices are based on the brokerage’s disclosures in the report. Implied upside or downside figures are calculations based on the prices and target prices disclosed by Jefferies and should not be treated as separate brokerage forecasts. The information is provided solely for informational and educational purposes and should not be considered investment advice, a recommendation to buy, sell or hold any security, or a substitute for independent financial research. Brokerage estimates, ratings, earnings forecasts and target prices are subject to change and may differ from actual business or market outcomes. Stock market investments are subject to market risks, including the possible loss of principal. Past performance does not guarantee future returns, and projected earnings or returns may not materialise due to changes in economic conditions, company performance, regulations, input costs, competition, demand and other factors. Readers should independently assess the information, consider their own financial circumstances and investment objectives, and consult a qualified financial adviser before making any investment decision. Neither the author nor the publication assumes responsibility for any financial loss arising from reliance on the information presented in this article.