Jefferies Bullish On Electronics Manufacturing Sector, Amber Enterprises Remains Top Stock Pick

With electronics manufacturing services stocks like Amber Enterprises, Kaynes Technology, and Dixon Technologies delivering stellar returns in 2024—surging between 135% and 180%—the EMS sector in India is a high growth frontier, according to Jefferies.

Amber Enterprises (Buy, Price Target: Rs 8,840, Upside: 15%)

Amber's strong foothold in margin-accretive components makes it the standout, according to the firm. The company is reportedly exploring an IPO for its electronics division, which contributes 19% of fiscal 2025's first half sales at a healthy 7-8% operating margin.

Kaynes Technology (Hold, Price Target: Rs 6,950, Downside: 8%)

Kaynes' focus on semiconductors, PCBs, and outsourced semiconductor assembly and test positions it for long-term growth, says Jefferies. However, despite its potential, Jefferies rates Kaynes as 'hold' due to rich valuations.

Dixon Technologies (Underperform, Price Target: Rs 12,600, Downside: 32%)

With over 80% of revenue from original equipment manufacturing, Dixon's low-margin profile keeps it underperforming, holds the brokerage. Its mobile-focused PLI benefits are set to expire in 2-3 years, limiting growth visibility, they add.

Syrma SGS (Buy, Price Target: Rs 730, Upside: 15%)

Syrma's growth strategy in electronics components and government-aligned policies also align with Jefferies' positive outlook.

Amber and Kaynes lead this wave of diversification, with Amber's electronics division expected to unlock further value. However, risks such as demand slowdown, customer attrition, and supply chain bottlenecks could temper optimism.