Can India's EMS Sector Deliver Another Multi-Year Growth Cycle?
India's Electronics Manufacturing Services (EMS) industry continues to attract positive attention as government incentives, import substitution and global supply-chain diversification accelerate domestic manufacturing. Jefferies believes the sector remains in the early stages of a structural growth cycle and expects component manufacturers to benefit the most over the coming years.
The brokerage remains constructive on the sector after the government significantly increased support under the Electronics Components Manufacturing Scheme (ECMS), further strengthening India's ambition to become a global electronics manufacturing hub.
Jefferies' Key Observations
✔ ECMS allocation increased by 75% in February 2026 to ₹40,000 crore.
✔ Only about 26% of the initial Production Linked Incentive (PLI) outlay is estimated to have been disbursed so far, indicating significant room for future incentives.
✔ Jefferies estimates ECMS could eventually support nearly 50% of the mobile phone Bill of Materials (BoM).
✔ Printed Circuit Boards (PCBs) remain a major opportunity with an estimated US$5 billion Total Addressable Market (TAM).
✔ Around 85–90% of India's PCB requirement is currently imported, while a 30% Anti-Dumping Duty (ADD)
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Preferred Stocks
| Company | Jefferies View | Reason |
|---|---|---|
| Syrma SGS Technology | Bullish | Component manufacturing opportunity. |
| Kaynes Technology | Bullish | Beneficiary of localisation and higher value addition. |
| Dixon Technologies | Hold | Positive long-term outlook, but relatively balanced valuation. |
India's electronics manufacturing ecosystem is benefiting from supportive government policies, rising localisation, increasing global outsourcing and growing domestic demand. PCB manufacturing presents one of the largest opportunities because India still relies heavily on imports. However, investors should monitor policy implementation, execution capabilities, global demand cycles and competitive pressures as the industry scales.
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Investor Takeaway
Derivative Pro & Nifty Expert Gulshan Khera, CFP®, observes that India's EMS industry appears well positioned for sustained structural growth as policy support increasingly shifts towards higher domestic value addition. Jefferies expects EMS companies to deliver an average earnings CAGR of around 26% between FY26 and FY29, with component manufacturers likely to remain key beneficiaries of India's electronics manufacturing expansion.
Related Queries
• What is the Electronics Components Manufacturing Scheme (ECMS)?
• Why is Jefferies bullish on EMS companies?
• Why are PCB manufacturers important for India?
• Which EMS stocks does Jefferies prefer?
• How is the PLI scheme supporting electronics manufacturing?
Disclaimer: Brokerage opinions reflect the views of the respective research firm and are intended for informational purposes only. Investors should conduct independent research before making investment decisions.
