The Indian electronics manufacturing services sector is in focus as Motilal Oswal projects a 42% profit growth rate for the industry by the 2028 financial year. This surge is being powered by the production-linked incentive scheme and a substantial increase in the government budget for local components, which has now reached Rs 40,000 crore.
According to the analysis by the domestic brokerage firm, companies are successfully moving into high-margin areas like defence, aerospace, and electric vehicles to strengthen their market positions.
Motilal Oswal reports that the government is increasing financial support through the electronics components manufacturing initiative to ensure the industry continues its upward trajectory. The firm expects the entire group to see revenue grow by 30% through the end of the 2028 financial year as local demand and new export opportunities gain momentum. While some firms face short-term pressures from specific contracts, the brokerage firm believes that strong order flows and government support provide the necessary energy for these companies to expand their production capacity.
Motilal Oswal on Kaynes Technology: ‘Buy’
The target price for the stock is set at Rs 8,200, which represents a potential upside of over 115% for Kaynes Technology. Motilal Oswal indicates that the company will benefit greatly from government approvals for its advanced circuit board manufacturing project in Tamil Nadu. This project involves a total spending of Rs 3,700 crore and helps the company become self-sufficient in critical high-tech materials. The brokerage firm expects this backward integration to lower costs significantly and support long-term growth as the company expands its industrial and smart meter business across the country.
“Kaynes has received government approval and a capital subsidy under the PLI scheme for the second phase of its advanced PCB manufacturing project near Tuticorin, Tamil Nadu,” Motilal Oswal
Motilal Oswal on Dixon Technologies: ‘Buy’
The target price is set at Rs 22,500, which implies an upside of approximately 113% for Dixon Technologies. Motilal Oswal reports that the firm is scaling its revenue by entering new partnerships for mobile phones and premium lighting products. They are also focusing on making their own components like camera modules and displays, to protect their profit margins as government incentives change over time.
The brokerage firm mentions that strategic joint ventures for IT hardware and robotic vacuum cleaners will further increase the company’s scale in the coming years.
Motilal Oswal on Syrma SGS Technology: ‘Buy’
The target price is Rs 1,000, showing a potential upside of 18% for Syrma SGS Technology. Motilal Oswal points out that the company is moving away from simple assembly to more profitable sectors like medical devices and defense electronics. Their upcoming facility in Andhra Pradesh is already receiving positive feedback from large customers who want to source their components locally. The brokerage firm expects the company to see improved margins as they reduce their focus on lower-margin consumer products by the end of the 2026 financial year.
“Syrma has shifted its focus from being a traditional EMS assembler, and it is targeting high-margin sectors such as smart energy meters, solar trackers, automotive EV chargers,” it further added.
Motilal Oswal on Avalon Technologies: ‘Buy’
The target price is Rs 1,330, which is an upside of 35% for Avalon Technologies. Motilal Oswal analysis indicates that the firm has partnered with a global semiconductor equipment maker to build complex systems. This new work is expected to be a major driver of growth starting in the 2027 financial year as the production phase begins. The firm is also making progress in making parts for satellite communication systems and airplane cabins, with some contracts lasting up to fifteen years.
“Notably, Avalon has entered into a partnership with a leading global semiconductor equipment manufacturer to produce highly complex, Industry 4.0-compliant box-build systems,” the report noted.
Motilal Oswal on Amber Enterprises: ‘Buy’
The target price is Rs 8,400, representing a potential upside of approximately 5% for Amber Enterprises. Motilal Oswal indicates that the company is expanding its consumer products to include large commercial air conditioning units of up to 17.5 tons. They have also taken a majority stake in Power-One to enter the market for solar inverters and electric vehicle chargers. The brokerage firm expects the company to transition into a full provider of industrial electronics and railway equipment through new joint ventures.
“In the electronics segment, the company acquired a majority stake in Power-One Microsystems, which expands Amber’s presence in solar inverters, EV chargers, and battery energy storage systems,” Motilal Oswal noted.
Motilal Oswal on Cyient DLM: ‘Buy’
The target price is Rs 550, which implies a potential upside of 68% for Cyient DLM. Motilal Oswal reports that the company secured two new global clients in the medical and industrial motor categories during the last quarter. While recent revenue has been lower due to earlier large orders being completed, the total order book has grown to Rs 2,350 crore. The brokerage firm is optimistic about the company’s performance in the final quarter of the year, driven by the industrial and automotive segments.
Conclusion
Motilal Oswal maintains a positive outlook on the future of India’s electronics manufacturers as the industry moves toward high-value technology sectors. The brokerage firm believes that strong order flows and government support will provide the necessary momentum for these companies to expand their production capacity. While some firms face short-term pressures from specific contracts, the overall direction of the sector remains strong due to local demand and new export opportunities.