EMS Industry Q4 Results Preview - Likely Mix Bag ; Price Correction After Sharp Valuation Rerating: Systematix

Systematix Research Report

Q4 is the biggest revenue generating quarter among all four quarters for most of the electronic manufacturing services companies.

The seven EMS companies under our coverage are expected to report mix bag results in Q4 FY24 with their aggregate revenue/Ebitda/profit after tax likely to grow 42%/22%/18% YoY and 45%/67%/111% QoQ, led by Dixon Technologies India Ltd. (up 84%/44%/52% YoY and 17%/23%/26% QoQ), PG Electroplast Ltd. (up 27%/26%/48% YoY and 98%/128%/209% QoQ) and Kaynes Technology India Ltd. (up 63%/40%/29% YoY and 17%/19%/18% QoQ).

While all segments are expected to grow strongly, likely faster growth in the high-volume low mix segments (consumer, electric vehicle, railways etc.) would negate benefits of operating leverage and restrict overall margin expansion, in our view.

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