Goldman Sachs trims Q1 estimates on EMS, durables; turns positive on C&W

Goldman Sachs on India Industrials: Goldman Sachs has cut earnings estimates for Electronics Manufacturing Services (EMS) and consumer durables companies for June quarter of financial year 2026 (Q1FY26) amid weak summer product sales and margin headwinds, while raising projections for cable and wire (C&W) players on better volume growth.

 

That said, the New York-based brokerage expects a mixed June quarter earnings season for India’s industrial space, with divergent trends across electricals, durables, EMS, and cables and wires.

 

Reflecting upon these divergent trends, Goldman Sachs retained its ‘Buy’ ratings on Crompton Greaves Consumer Electricals, Havells, and KEI Industries, citing stronger fundamentals and growth visibility. It maintained a ‘Sell’ rating on Dixon Technologies and Voltas, given earnings pressure and weak near-term outlook.

 

“We cut our earnings estimates for EMS and durables, while increasing for C&W. We have a ‘Buy’ rating on Crompton, Havells, KEI and ‘Sell’ on Dixon and Voltas,” said Pulkit Patni and Nirmal Gopi, research analysts at Goldman Sachs, in a note dated June 19. 

 

On the bourses, around 10:50 am, Crompton Greaves was trading 1.06 per cent higher at ₹343.25, Havells (up 0.40 per cent to ₹1,524.25), while KEI (down 0.73 per cent to ₹3,576.10). Dixon Technologies was up 0.60 per cent to ₹14,079.85, and Voltas was up 0.46 per cent at ₹1,265.65.

 

Durables and electricals, analysts at Goldman Sachs said, are likely to report subdued performance in Q1, as consumer (B2C) demand remains muted despite supportive macroeconomic indicators like falling inflation, interest rate cuts, and tax relief.

 

Goldman Sachs noted that real estate-led demand is yet to pick up, and the tepid performance of cooling products has dragged growth. However, B2B segments are faring relatively better, buoyed by robust government capital expenditure and execution of schemes such as PM-KUSUM, RDSS, and BharatNet.

 

Meanwhile, margin pressure is expected to persist for durables, with negative operating leverage only partly cushioned by lower commodity prices and selective price hikes.

 

In EMS, Amber Enterprises may see pressure from a weak RAC segment in Q1, though growth in new verticals should offer some cushion. For Dixon, Goldman Sachs analysts anticipate some front-loading of exports—particularly for Motorola—during the quarter.

 

Conversely, the outlook for cables and wires is relatively robust. Although a year-on-year (Y-o-Y) decline in copper prices could cap value growth, Goldman Sachs sees mid-teen volume growth driven by restocking activity amid rising copper and aluminium prices through May and June.