Better Than Dixon Tech, Kaynes Tech? Morgan Stanley Upgrades Outlook On This EMS Stock

At a time when Dixon Technologies and Kaynes Tech have numerous headwinds, their peer, Syrma SGS, has emerged as a favourable pick for Morgan Stanley, amid strong growth and demand. 

In its latest note, the brokerage firm has upgraded their stance on Syrma SGS from 'equal-weight' to 'overweight', hiking the target price from Rs 712 to Rs 992, citing strong execution, which has led to healthy and profitable growth in the past four quarters.

Morgan Stanley particularly highlights the fact that Syrma SGS has managed to sustain growth in an environment where most of its peers have found it difficult to do so. 

Keeping that in mind, the brokerage has turned constructive on the counter, with much of the positive outlook being driven by relative resilience in revenue growth, improving margin trajectory and a healthy net working capital. 

This compares to peers such as Dixon Tech and Kaynes Tech, both of which have witnessed major drawdowns in the past few months, with businesses slowing down and headwinds persisting. 

Morgan Stanley, in fact, covers both the counters but is not constructive on either of them. The firm has an 'equal-weight' rating on Kaynes Tech with a target price of Rs 6,155. Although the target price still suggests sizable upside from current levels, the brokerage firm has refrained from appearing completely bullish on the counter. 

Morgan Stanley is even more bearish on Dixon Technologies, as they hold a 'underweight' target of Rs 8,157, which suggests a significant downside from current levels. Recent brokerage notes, in fact, have indicated that there could be tough times ahead for Dixon Tech, with Mobile PLI potentially ebbing away.

ALSO READ: Tough Times Ahead For Dixon Tech After Budget 2026? Brokerages Say Yes; Pick Other EMS Stocks

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