How Are EMS Companies Expanding Into PCBs and Modules as per Jefferies?
⚡ India’s Electronic Manufacturing Services (EMS) sector is entering a new growth phase as global supply chains diversify and government incentives boost domestic capacity. Jefferies’ latest analysis highlights aggressive expansion moves by leading EMS companies such as Amber, Syrma, and Dixon. With fresh investments planned in printed circuit board (PCB) manufacturing, cameras, and display modules, the industry looks set for a major transformation over the coming years.
About EMS Companies
EMS companies provide contract-based manufacturing services for electronic components and finished goods. India’s EMS sector has been growing rapidly, supported by strong demand from consumer electronics, automotive, telecom, and industrial sectors. Government schemes like the Production Linked Incentive (PLI) and the Components Scheme have further accelerated investments in local capacity.
📌 Jefferies notes that Amber and Syrma have applied for PCB manufacturing under the government’s Components Scheme, while Dixon is preparing to foray into camera and display modules.
PCB Manufacturing Opportunity
Printed circuit boards form the backbone of all electronic products. India has traditionally been dependent on imports, but the government is keen to build domestic capabilities. Jefferies highlights that PCB manufacturing typically requires ₹18–20M in construction costs, with asset turns of ~1x and operating profit margins (OPM) of 15% at scale.
🏭 For Amber, the electronics division is expected to contribute more than 30% of revenues by FY28e (vs 22% in FY25), highlighting its growing importance within the business portfolio.
Syrma’s Foray into PCB
For Syrma, PCB manufacturing marks a fresh diversification move. However, Jefferies estimates that the contribution to overall sales will remain modest in the medium term, likely accounting for less than 5% of sales by FY29e. The long-term potential remains significant, but initial gains will be limited.
📉 While Syrma’s entry is promising, the smaller scale means investors should not expect a near-term revenue surge from this vertical.
Dixon’s Expansion Beyond Traditional Segments
Dixon, a market leader in contract manufacturing, is now preparing to expand into camera and display modules. This aligns with India’s growing demand for smartphones, wearables, and consumer electronics. Entry into these high-value components could provide Dixon with margin expansion and strategic differentiation compared to peers.
💡 Jefferies highlights this as a structural positive, positioning Dixon to benefit from the growing push for local sourcing in electronics manufacturing.
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Capex Outlook for EMS Players
Jefferies estimates that EMS companies will invest nearly ₹90 billion in capex during FY26–28e, significantly higher than the ₹58 billion invested during FY23–25. This aggressive capex cycle reflects industry optimism and government support, but it also raises questions about execution risks and returns on investment.
✅ If executed well, this capex cycle could transform India into a competitive hub for PCB and electronic module manufacturing, reducing import dependence.
Investor Takeaway
EMS companies are entering an exciting expansion phase, with Amber, Syrma, and Dixon leading the charge into PCBs and modules. While Amber is set to benefit the most with a rising revenue share from electronics, Syrma’s contribution remains modest in the medium term. Dixon’s diversification into high-value modules adds a structural growth lever. Investors should watch execution risks but note that rising capex and government incentives could unlock long-term opportunities. For more market-driven insights, visit Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
