India’s Electronics Manufacturing Services (EMS) sector could be among the biggest beneficiaries of the government’s renewed push to build a domestic semiconductor ecosystem, according to Motilal Oswal. Against this backdrop, Motilal Oswal identified Dixon Technologies, Cyient DLM and Syrma SGS Technology as its preferred listed companies in the sector.
It also expects Dixon Technologies and Amber Enterprises India Ltd. to participate in the Mobile Phone Manufacturing Scheme, which is aimed at expanding domestic production and exports while increasing local value addition.
Following an expert interaction on recent policy initiatives, the brokerage said incentives proposed under Semicon 2.0 and the Mobile Phone Manufacturing Scheme are expected to strengthen the domestic supply chain over the next five years by encouraging investments across semiconductor materials, specialty gases, module manufacturing. \
Motilal Oswal on Dixon Technologies
Motilal Oswal has identified Dixon Technologies as one of its preferred stocks in the Electronics Manufacturing Services space, citing the company’s positioning to benefit from the government’s efforts to deepen India’s electronics manufacturing ecosystem. The brokerage believes incentives proposed under Semicon 2.0 and the Mobile Phone Manufacturing Scheme will encourage investments across module manufacturing, printed circuit boards, semiconductor materials and other upstream components, strengthening domestic value addition over the coming years.
It also noted that recent government incentives have already encouraged companies such as Dixon Technologies to expand module manufacturing. According to the brokerage, the Mobile Phone Manufacturing Scheme is expected to improve customer stickiness and margins for participating companies, with Dixon Technologies among the companies likely to participate.
“We remain positive on the EMS sector, and our top picks in the space are Dixon Technologies, Cyient DLM, and Syrma SGS,” said Motilal Oswal.
Motilal Oswal on Cyient DLM
Cyient DLM is also among Motilal Oswal’ preferred stocks in the Electronics Manufacturing Services sector. The brokerage’s positive view is based on its expectation that India’s semiconductor ecosystem will expand well beyond fabrication into packaging, semiconductor materials, specialty gases, research and development, module manufacturing and printed circuit boards.
According to the brokerage, the success of the policy framework will depend on simultaneous development across the entire semiconductor value chain, creating opportunities for companies engaged in electronics manufacturing. It believes the proposed incentives could strengthen domestic manufacturing capabilities while reducing dependence on imported components over time.
Motilal Oswal on Syrma SGS Technology
Motilal Oswal has also retained Syrma SGS Technology among its preferred Electronics Manufacturing Services companies as it expects policy support to extend across multiple segments of the semiconductor supply chain. The brokerage said Semicon 2.0 broadens the government’s focus beyond fabrication by supporting semiconductor materials, advanced and legacy packaging, specialty gases, module manufacturing, printed circuit boards, research and development, and talent development.
It believes these initiatives will help strengthen the domestic ecosystem and improve supply chain resilience over the next several years, creating opportunities for companies operating across electronics manufacturing.
Amber Enterprises likely to benefit from mobile manufacturing scheme
Motilal Oswal expects Amber Enterprises, along with Dixon Technologies, to participate in the Mobile Phone Manufacturing Scheme. According to the brokerage, the scheme is expected to improve customer stickiness and margins for participating companies.
The report states that the scheme has a budgetary outlay of Rs62,500 crore and will run from Financial Year 2027 to Financial Year 2031. It offers incentive support ranging from 2.25% to 5%, an additional domestic sourcing incentive of up to 1.5%, and an extra 3% incentive on eligible sales for Indian brands investing in product design and research and development.
The government expects the programme to help achieve production of Rs39,00,000 crore, expand exports and generate 60,000 direct jobs during the scheme period. “The mobile phone scheme incentives will particularly enhance customer stickiness and will also improve margins going forward, particularly for players like Dixon. Among the listed space, we expect Dixon and Amber to participate in MPMS,” added Motilal Oswal
Avalon, Kaynes and Data Patterns part of brokerage’s EMS coverage universe
Motilal Oswal also included Avalon Technologies, Kaynes Technology and Data Patterns in its Electronics Manufacturing Services coverage universe alongside Amber Enterprises, Dixon Technologies, Cyient DLM and Syrma SGS Technology. The report presents their relative valuation metrics, including earnings estimates, price-to-earnings multiples, return on equity and expected growth projections.
However, it did not provide separate investment notes or company-specific commentary on these businesses in this report. The brokerage’s broader assessment is that India’s semiconductor ecosystem must develop across every stage of the value chain, with policy support extending to semiconductor materials, specialty gases, module manufacturing, printed circuit boards, packaging, research and development, and talent development. It believes this integrated approach will help create a stronger domestic electronics manufacturing ecosystem.
“India’s semiconductor ecosystem must develop simultaneously across the entire value chain, as no segment can scale up independently,” noted Motilal Oswal.
Conclusion
Motilal Oswal believes the latest policy measures could strengthen India’s electronics manufacturing ecosystem by encouraging investments across multiple segments of the semiconductor value chain instead of focusing only on fabrication.
The brokerage expects the incentives under Semicon 2.0 and the Mobile Phone Manufacturing Scheme to support domestic value addition, strengthen supply chains and encourage fresh investments over the next five years. Within the listed Electronics Manufacturing Services space, it has identified Dixon Technologies, Cyient DLM and Syrma as its preferred stocks, while also expecting Dixon and Amber Enterprises to participate in the Mobile Phone Manufacturing Scheme. Avalon, Kaynes and Data Patterns continue to remain part of the brokerage’s broader Electronics Manufacturing Services coverage universe.
Disclaimer: The research report inclusions, stock commentary, and target-price details outlined above are sourced from brokerage updates issued by Motilal Oswal for informational and educational purposes only. This coverage does not constitute financial advice, an offer, or a direct solicitation to buy, sell, or hold any security. Individual investment decisions should be based on personal risk appetite and made in consultation with a SEBI-registered investment advisor. This disclaimer has been generated using AI to support user well-being and responsible content consumption.