The EMS sector stocks are in focus. Global brokerage firm Nomura in its recent report covered Kaynes Technology and Dixon Technologies ahead of Q4FY26 and pointed to five specific factors to assess March quarter performance. The brokerage expects Kaynes to report strong growth backed by execution across segments, while Dixon is likely to face pressure from weak mobile demand and margin compression.
Kaynes Vs Dixon: Q4 projections
Nomura estimates Kaynes will post revenue of Rs 1,518 crore in Q4FY26, up 54% year on year, with EBITDA rising 47% to Rs 246 crore. Dixon’s revenue is expected at Rs 10,397 crore, up just 1% year on year, while EBITDA may decline 10% to Rs 399 crore. The difference in growth and profitability is driven by demand exposure, execution strength and segment mix, according to the brokerage.
Nomura has maintained a Buy rating on both Kaynes and Dixon. The report indicates strong earnings growth visibility for Kaynes, while Dixon’s near-term performance remains linked to recovery in the mobile segment.
| Metric | Kaynes Technology | Dixon Technologies |
| Q4FY26 Revenue (₹ crore) | 1,518 | 10,397 |
| Revenue Growth (YoY) | 0.54 | 0.01 |
| Q4FY26 EBITDA (₹ crore) | 246 | 399 |
| EBITDA Growth (YoY) | 0.47 | -10% |
| Growth Drivers | Strong demand exposure, better execution, favorable segment mix | Slower growth due to weak mobile segment recovery |
| Outlook | Strong earnings growth visibility | Near-term performance tied to mobile segment recovery |
| Brokerage Rating (Nomura) | Buy | Buy |
Execution strength drives Kaynes ahead of Dixon
Nomura places execution as one of the important factor shaping Q4FY26 performance.
Kaynes continues to benefit from strong execution across business-to-business segments, which is expected to drive both revenue and margin expansion. The company is likely to see revenue growth of 54% year on year with EBITDA growth of 47%, supported by operating leverage, as per Nomura.
“Execution remains healthy and is likely to benefit Kaynes,” Nomura said.
Dixon’s performance is constrained by weak volumes in its core mobile segment. Nomura expects a 17% year-on-year decline in mobile volumes, which offsets gains in telecom, IT hardware and camera modules, the report added.
This gap in execution is tied to the nature of contracts, with Kaynes benefiting from longer-cycle projects while Dixon remains exposed to consumer demand cycles, as per Nomura.
Mobile demand weakness weighs on Dixon’s growth
Nomura then comes to the slowdown in smartphone demand.
Nomura expects global smartphone shipments to decline around 13% year on year in 2026, with sharper declines in the affordable segment. This trend has already started reflecting in domestic sales.
“India mobile industry sales were down 9% year-on-year in the first nine weeks of 2026,” Nomura said.
Dixon’s heavy reliance on mobile manufacturing makes it more vulnerable to this slowdown. The brokerage expects overall mobile demand to decline 10% to 15% in FY27, with a steeper drop in the budget segment.
Kaynes remains less exposed to smartphones, with its portfolio spread across industrial, automotive and aerospace electronics, which provides stability to growth, it further explained.
Margin profile shows sharp divergence
Kaynes is expected to report EBITDA margins of around 16.2% in Q4FY26, supported by operating leverage and strong execution. Dixon’s EBITDA margin is expected at 3.8%, down about 50 basis points year on year, based on the firm’s analysis.
The pressure on Dixon’s margins comes from lower volumes and rising input costs. “The sharp jump in memory prices continue to drive sharp price hikes in the smartphone segment,” Nomura said.
Higher component costs combined with weak demand conditions limit Dixon’s ability to pass on price increases. Kaynes, with a different business mix, is better positioned to absorb cost pressures, as per Nomura.
Order visibility supports Kaynes while Dixon awaits triggers
Kaynes continues to benefit from a strong order book across segments, which supports sustained growth. Nomura expects execution across these segments to remain steady.
Dixon’s growth outlook depends on multiple triggers such as new customer additions, export opportunities and partnerships, it added.
“Approval for the Vivo JV remains a key catalyst for recovery from second half of FY27,” Nomura said.
Nomura also expects that any meaningful margin recovery for Dixon will become visible only from the second half of FY27, indicating that near-term performance may remain under pressure.
Business mix defines resilience in current demand cycle
The fifth factor is business mix, which plays a critical role in the current demand environment.
Kaynes operates largely in business-to-business electronics manufacturing, where demand remains steady and linked to long-term contracts. This provides stability in revenue and margins, as per Nomura.
Dixon’s exposure remains skewed towards consumer electronics, particularly smartphones, where demand has weakened. “The EMS segment for B2C is also likely to see softness, led by the mobile segment, while B2B EMS should do well,” Nomura said.
This difference in positioning places Kaynes in a stronger position for Q4FY26, while Dixon continues to be impacted by consumer demand trends, as per Nomura.
Additional factor on sector demand and cost pressures
Nomura also points to broader sector conditions that affect both companies but with different intensity.
Demand across most consumer-facing segments remains subdued due to weather-related disruptions and weak consumption trends. At the same time, commodity and component cost inflation continues to put pressure on margins, as per Nomura.
“Weaker demand is likely to make it difficult to pass on the sharp jump in commodity costs, leading to margin headwinds in FY27,” Nomura said.
Kaynes is relatively insulated due to its business mix, while Dixon faces a more direct impact due to its exposure to consumer electronics, Nomura added.
Conclusion
Nomura’s comparison of Kaynes and Dixon ahead of Q4FY26 points to a quarter where execution strength, demand exposure and margins are expected to drive performance.
Kaynes is estimated to report strong revenue and EBITDA growth supported by steady execution and order visibility. Dixon is likely to see muted growth as per Nomura, even as it builds new growth drivers.
Disclaimer: The following analysis of Kaynes Technology and Dixon Technologies is based on third-party brokerage estimates and sector trends. It is intended for informational purposes only and does not constitute a recommendation to buy, sell, or hold any security. Investors are advised to consult with a SEBI-registered financial advisor to evaluate these projections against their individual risk profiles and long-term investment objectives.
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