Dixon, Kaynes, Amber, Syrma surge up to 5%; what's driving EMS stocks?

Share price movement of electronic manufacturing services (EMS)

 

Shares of electronic manufacturing services (EMS) companies were in focus and rallied up to 5 per cent on the BSE in Thursday’s intra-day trade after the government extended customs duty concessions on a range of machinery and components used in electronics manufacturing until March 31, 2029. 

 

Dixon Technologies (India) (Dixon), Syrma SGS Technology, Amber Enterprises India, Kaynes Technology India, PG Electroplast and EPACK Durable were up in the range of 2 per cent to 5 per cent in intra-day deals. In comparison, the BSE Sensex was up 0.60 per cent at 76,963 at 10:38 AM.

 

 

The stock price of Dixon surged 5 per cent to ₹13,590, quoting at its highest level since December 17, 2025. It hit a 52-week high of ₹18,471.50 on September 25, 2025. The stock touched an all-time high of ₹19,149.80 on December 17, 2024.

 

What’s driving EMS stocks?

 

The Centre extended customs duty concessions on a range of machinery and components used in electronics manufacturing until March 31, 2029. The relief covers machinery for lithium-ion battery manufacturing, display assembly components for automotive and medical applications, wireless charging components for mobile phones, and other specified electronics manufacturing inputs, aiming to reduce input costs and encourage investments in domestic electronics manufacturing.

 

The policy provides long-term cost visibility and strengthens the economics of local electronics manufacturing by lowering the cost of importing critical machinery and components. It is positive for EMS and consumer electronics manufacturers such as Dixon Technologies, Amber Enterprises, Kaynes Technology, Syrma SGS Technology, PG Electroplast, and Epack Durable, as it supports capacity expansion, localization efforts, and export competitiveness while improving the attractiveness of investments in advanced electronics and battery manufacturing, said ICICI Securities in a note.

 

Brokerages view on Dixon

 

Dixon’s March 2026 quarter (Q4FY26) revenue remained flat due to geopolitical concerns, softer consumer demand, inventory rationalization by brands, elevated input costs, majorly impacting the smartphone and IT hardware segment. Electronics industries continue to face inflationary pressure in key components such as memory chips and semiconductor linked inputs, driven by AI-led demand and supply constraints resulting in cautious procurement behavior towards brands.

 

Despite near-term headwinds, the management said the company continued to strengthen its customer partnerships and expand capacities across segments while accelerating backward integration and localization strategy.

 

The management remains confident in the long-term Indian EMS opportunity supported by supply chain diversification, increased localization, supportive government policies, Productions Linked Incentive (PLI)-led scale expansion and continues to create a strong multiyear growth runway for the industry.

 

Analysts at JM Financial Institutional Securities upgraded Dixon to BUY (from ADD) with a target price of ₹14,200 (from ₹11,200).

 

The rating upgrade of Dixon is premised on rising smartphone average selling prices compensating for sluggish volumes, alleviating concerns of a sharp revenue decline. Dixon is on track to achieve its 33 million ex-Vivo smartphone volume guidance for FY27E; Vivo JV and PLI 2.0-led exports readying it for FY28E/29E (63-65mn/68??'72mn) aspirations.

 

Approvals for the Vivo JV are expected soon and should start contributing by end-Q2FY27E (latest, H2FY27E), largely negating the need for sharp EPS downgrades hereon. IT hardware (FY27E ₹ 5,000 crore revenue) and telecom equipment (FY27E >₹ 8,000 crore revenue) are scaling up well; servers and optical transceivers (aided by Gemtek JV) providing new growth arenas, while, backward integration initiatives regarding display and camera sub-assemblies are largely on track, belive analysts.

 

Analysts at ICICI Securities reckon that a considerable part of the negatives (Vivo approval delay, uncertainty over PLI scheme, memory card cost spike) are known to markets and factored into the stock price, making the risk-reward favourable. These concerns are likely to be a cause of delay in company’s growth outlook and not necessarily denial. Going ahead, Vivo JV approval and PLI 2.0 updates are likely to be the key factors to watch out.  ===================================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.