EMS Industry - Strong Performance Key To Support Re-Rating: Systematix

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Systematix Reports

The seven electronic manufacturing services companies under our coverage are expected to report strong results in Q3 FY24 with their aggregate revenue/Ebitda/profit after tax likely to grow 66%/47%/75% YoY and 15%/23%/34% QoQ, led by Dixon Technologies India Ltd. (up 119%/98%/145% YoY and 7%/10%/12% QoQ), Syrma SGS Technology Ltd. (up 51%/24%/10% YoY and 9%/21%/28% QoQ), Kaynes Technologies Ltd, (up 35%/30%/44% YoY and 8%/10%/2% QoQ) and PG Electroplast Ltd. (up 30%/27%/51% YoY and 30%/25%/67% QoQ).

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Our estimates are based on assumptions of sustained revenue traction in key verticals and sequential margin expansion.

Amber Enterprises India Ltd. is expected to report 12%/30%/52% YoY and 63%/71%/L2P QoQ rise in revenue/Ebitda/profit after tax.

Avalon Technologies Ltd. is likely to post soft revenue (up 5% YoY and 22% QoQ) but healthy Ebitda/profit after tax (up 10%/130% YoY and 76%/81% QoQ). Elin Electronics Ltd. weak performance is likely to continue in 3Q with PAT declining 28% YoY and 16% QoQ.

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