EMS Industry - Poised For Strong Growth: Systematix

Systematix Research Report

India is currently at a nascent stage in electronics manufacturing, and we see electronics manufacturing services as a decadal theme from investment perspective. Government of India’s vision of Make in India, Make for world, backed by various schemes and incentives has aided to India’s growing acceptance as an alternate manufacturer to China.

Import substitution and India’s rising penetration in domestic market provide large opportunity for the Indian EMS industry. Valuations may look expensive in the near term after significant rally in scrips, we believe strong growth prospects would continue to fetch investors interest in the industry.

We thus remain structurally positive on the EMS industry prospects.

Near term concern

Slowdown in few consumer categories (fans, lights, small home and kitchen appliances) and inventory normalisation in few global markets have put a temporary break on the high growth journey of companies exposed to these categories and markets.

However, companies find this transient and have thus maintained robust outlook for medium to long term.

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