Kaynes Vs Syrma Vs Avalon: Which EMS stock wins India’s $850 billion data centre boom? 

Emkay’s EMS sector picks: Rates Syrma ‘Buy’ but recommends ‘Reduce’ for Kaynes

Syrma SGS and Avalon get ‘Buy’ ratings from Emkay, while Kaynes gets a ‘Reduce’. The more interesting part is what sits behind those calls: Kaynes is expected to grow revenue fastest, Avalon has the strongest projected profit growth, while Syrma SGS offers the most favourable risk-reward in Emkay’s estimates.

With global datacentre capital expenditure estimated at $750-850 billion a year between 2026 and 2029, the three stocks are chasing the same broad electronics opportunity through very different business models and expansion plans.

Company	Emkay rating	Target price	Upside / downside	FY26-29 revenue CAGR	FY26-29 PAT CAGR
Syrma SGS Technology	‘Buy’	Rs 2,050	35.0% upside	39.6%	43.0%
Avalon Technologies	‘Buy’	Rs 2,400	24.4% upside	44.3%	56.8%
Kaynes Technology	‘Reduce’	Rs 3,300	11.6% downside	47.1%	32.2%

Source: Emkay Research, August 11, 2026.

Emkay on Syrma SGS Technology: ‘Buy’

Syrma SGS is Emkay’s top pick among the three. The brokerage says its case rests on diversified organic and inorganic growth, margin expansion opportunities and a consistent execution track record. The company has expanded across automotive, industrial, medical technology, information technology and railway electronics, while partnerships and joint ventures are adding newer opportunities.

The artificial intelligence server opportunity gives Syrma SGS a direct entry into a fast-growing segment. The company has started printed circuit board assembly for two Giga Computing server platforms, with a roadmap towards system integration and complete box-builds. Emkay says Giga Computing focuses on artificial intelligence servers and has server architecture certifications from Nvidia, Advanced Micro Devices and Intel.

Target price and upside: Emkay has set a target price of Rs 2,050, implying 35.0% upside.

A quote in the report from Giga Computing’s Sales Director Andy Neo captures the nature of the partnership:

“Launching our first India-manufactured server product is an important step in our localization strategy. Working with Syrma SGS has enabled us to bring global server design and manufacturing excellence together, delivering high-quality products manufactured in India for the Indian market.”

Neo said this in the context of Giga Computing’s India-manufactured server product and its work with Syrma SGS.

Emkay expects Syrma SGS’s revenue to grow at a 39.6% compound annual rate between FY26 and FY29, while profit after tax is expected to grow at 43.0%. The brokerage also expects the company’s EBITDA margin to improve from 11.3% in FY26 to 12.5% in FY29 as the business mix improves.

Emkay on Avalon Technologies: ‘Buy’

Avalon’s case is built around its position as a one-stop shop for mission-critical box-build EMS. Emkay says about 75-80% of revenue comes from customers that have been with the company for more than nine years, giving the business a long-standing customer base.

The company’s order book grew at a 28% compound annual rate between FY21 and FY26, while long-term contracts grew at 15% between FY24 and FY26. US customers accounted for 59% of revenue in the first quarter of FY27, and management expects the US operations to break even by the end of FY27.

Target price and upside: Emkay has set a target price of Rs 2,400, implying 24.4% upside.

The brokerage sees opportunities for Avalon in power transmission systems, railway signalling, energy storage and semiconductor manufacturing equipment sub-assemblies. It is also the EMS partner for Kyosan’s electronic interlocking and Kavach products, with Kavach production guided to begin in the second half of FY27.

Emkay expects Avalon’s revenue to grow at a 44.3% compound annual rate between FY26 and FY29, while profit after tax is expected to grow at 56.8%. Its EBITDA margin is projected to rise from 10.8% in FY26 to 14.2% in FY29.

Emkay on Kaynes Technology: ‘Reduce’

Kaynes Technology India is the fastest-growing of the three on projected revenue, but Emkay’s rating is more cautious. The brokerage says the company’s execution risks have increased as it moves into capital-intensive businesses such as outsourced semiconductor assembly and test and high-density interconnect printed circuit board manufacturing.

Target price and downside: Emkay has set a target price of Rs 3,300, implying 11.6% downside.

Kaynes is expected to deliver a 47.1% revenue compound annual growth rate between FY26 and FY29, the highest among the three. But profit after tax is expected to grow at 32.2%, below Syrma SGS and Avalon. Emkay expects Kaynes’ EBITDA margin to decline from 15.8% in FY26 to 13.9% in FY29 before recovering over the longer term.

The report also notes that Kaynes declined to provide FY27 guidance in its fourth-quarter FY26 and first-quarter FY27 earnings calls, giving only directional guidance that it would grow at twice the industry rate. Emkay remains concerned about execution in the newer businesses.

Kaynes Whole-time Director and CFO J. Sampath had earlier explained the company’s approach to a delayed railway product:

“There’s a railway product which got postponed. And being a new product, we don’t want to aggressively push this through. We want to give time to all our designers to put their best foot forward so that we can get a bigger share of the business.”

The comment was made during Kaynes’ third-quarter FY26 earnings call and is cited by Emkay while discussing execution.

AI datacentre opportunity: High racks value meets low EMS margins 

Emkay sees artificial intelligence data centres as an important opportunity for Indian EMS companies. The brokerage estimates global data-centre capital expenditure will average $750-850 billion annually between calendar years 2026 and 2029. It says advanced artificial intelligence server racks can be priced at $2-3 million, although the EMS business itself carries relatively low margins of around 3.5-8%, depending on complexity and system integration.

Syrma SGS has the most direct company-specific exposure through its Giga Computing partnership. Avalon and Kaynes also have exposure through the National Supercomputing Mission, where both are approved vendors for Rudra 1 servers.

The opportunity therefore extends beyond traditional contract manufacturing. For these companies, the focus is increasingly on server assemblies, advanced printed circuit boards, system integration and other technically demanding electronics.

Printed circuit board Capex: Rs 6,950 crore pipeline to drive localisation 

Printed circuit board manufacturing is another important part of Emkay’s thesis. Kaynes, Syrma SGS, Amber and SRF are targeting commercialisation of Rs 6,950 crore of printed circuit board manufacturing capital expenditure by FY28, according to the report. Emkay estimates that this investment could add about $1 billion of production by FY30, assuming asset turns of around 1.5 times.

Syrma SGS plans to invest about Rs 800 crore by FY28 and Rs 1,530 crore by FY30 in its printed circuit board manufacturing joint venture with Shinhyup. The company is also receiving a 50% capital subsidy for the investment.

Kaynes is pursuing high-density interconnect and high-layer boards and is also developing a copper-clad laminate facility. Emkay sees the opportunity as significant, but says Kaynes’ decision to go alone in high-density interconnect and high-layer printed circuit boards adds execution risk.

EMS stocks: Railway and power transmission add more opportunities

Railway electronics is another growth area in Emkay’s report. The brokerage estimates that Kavach and electronic interlocking could together create at least Rs 500 crore of EMS EBITDA opportunity by 2030.

Avalon is the EMS partner for Kyosan’s electronic interlocking and Kavach products. Syrma SGS supplies railway electronics to global railway companies and Indian Railways and expects its Elemaster joint venture to add incremental revenue. Kaynes has taken a different route by developing its own Kavach product and licensing it to railway companies, which Emkay considers more difficult to execute.

Power transmission is another opportunity, particularly for Avalon. Emkay estimates around Rs 9 lakh crore of power-transmission investment is planned in India through 2032, with about Rs 6 lakh crore still to be deployed. The brokerage estimates an EMS opportunity of about Rs 1,200 crore annually in India from this spending.

EMS stocks: Which one has the strongest earnings growth?

The growth estimates show why Emkay has differentiated its ratings. Kaynes has the highest expected revenue growth between FY26 and FY29, but Avalon has the strongest projected profit growth. Syrma SGS sits between the two on revenue growth while maintaining a strong earnings trajectory.

Company	FY26-29 revenue CAGR	FY26-29 PAT CAGR	FY26 EBITDA margin	FY29E EBITDA margin
Syrma SGS Technology	39.6%	43.0%	11.3%	12.5%
Avalon Technologies	44.3%	56.8%	10.8%	14.2%
Kaynes Technology	47.1%	32.2%	15.8%	13.9%

Source: Emkay Research.

Avalon’s projected earnings growth is supported by its mission-critical box-build business and a growing mix of new opportunities. Syrma SGS is expected to benefit from higher-margin verticals and operating leverage. Kaynes, despite its faster revenue growth, is expected to absorb an initial profitability hit from its new businesses.

EMS stock picks: What Emkay’s targets convey

Emkay’s valuation framework puts Syrma SGS at the top, with 35% upside to its Rs 2,050 target. Avalon follows with 24.4% upside to Rs 2,400, while Kaynes has 11.6% downside to the Rs 3,300 target.

The difference is not simply about revenue growth. Emkay’s estimates also take into account the timing of new-business ramps, margin expansion, capital intensity and execution requirements. That is why the company with the fastest projected revenue growth does not receive the most positive rating.

Conclusion

Emkay’s comparison gives Syrma SGS the strongest preference among the three EMS stocks. Kaynes has the fastest projected revenue growth but its ‘Reduce’ rating reflects the brokerage’s concerns around execution and the near-term pressure from its capital-intensive new businesses.

The Emkay report offers a comprehensive outlook on the growth prospects overs the next three years. 

Disclaimer: This article is based on Emkay Research’s August 11, 2026 report and discusses the brokerage’s ratings, target prices, estimates and views. The information is provided for news-reporting and informational purposes only and does not constitute investment advice or a recommendation to buy, sell or hold any security. Brokerage estimates, ratings and target prices may change and may not materialise. Readers should conduct their own research and consult a SEBI-registered investment adviser before making investment decisions.