- Union Cabinet approved Mobile Phone Manufacturing Scheme (MPMS) with Rs 6,250 crore outlay until FY31
- Scheme offers 2.25%-5% production incentives plus up to 1.5% for domestic component sourcing
- Additional 3% incentives available for Indian mobile phone brands on design and R&D activities
The Union Cabinet's approval of the Mobile Phone Manufacturing Scheme (MPMS), widely referred to as Mobile PLI 2.0, has put electronics manufacturing stocks back in focus, with brokerages identifying Dixon Technologies and Amber Enterprises as the biggest potential beneficiaries.
Macquarie called Dixon the "clearest near-term beneficiary" of the revamped incentive scheme, while describing Amber Enterprises as a "sleeper beneficiary" that could benefit as it ramps up smartphone component manufacturing.
The new scheme, with an initial Rs 6,250 crore outlay and a five-year tenure until FY31, replaces the original mobile PLI programme that expired in March this year. Unlike the earlier scheme, the new framework also incentivises domestic value addition, component sourcing and Indian mobile phone brands.
Macquarie noted that while details are still emerging, the incentive structure is broader than expected. Besides production-linked incentives of 2.25%-5%, the scheme includes up to 1.5% incentives for domestic sourcing of key components and sub-assemblies, along with an additional 3% incentive for product design and R&D by Indian mobile phone brands.
According to the brokerage, the framework not only supports mobile assembly but also improves the business case for entering higher-value component manufacturing, including batteries and other electronics parts, creating new long-term opportunities for companies such as Dixon.
Amber, meanwhile, could be an underappreciated beneficiary. Macquarie said the company's recently announced partnership with Oppo for smartphone manufacturing means it can now qualify for incentives that were unavailable under the previous regime.
Jefferies also remains constructive on the sector, although it expects competition to be higher than when the first PLI scheme was introduced in 2020. The brokerage noted that Dixon was the standout beneficiary of PLI 1.0, but believes the revised framework could create opportunities for a wider set of players.
The brokerage highlighted that the government's Electronics Components Manufacturing Scheme (ECMS) has already approved applications for five camera module manufacturers — including Kaynes Technology, Syrma SGS, ASUS, Uno Minda and Dixon — along with three display module projects involving Samsung, Dixon and Wangda Technologies.
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