Kolkata: The Indian electronics manufacturing services sector is in the focus of both the government and investor. Prominent brokerage firm Motilal Oswal has projected a solid 42% profit growth rate for the electronics sector by FY28. The surge in the electronic sector is being assisted by the govt with production-linked incentive scheme and public budget for local. As a result these electronics firms are making successful forays in sectors such as defence, aerospace and EVs. The entry into high-value sectors also indicates a rise in the margins of these firms. Let’s have a look at some of the stock in this sector.
Kaynes Technology
Target price: Rs 8,200
Market price: Rs 3,916.20 (closing price of Feb 25)
The target price of Rs 8,200 signals a potential upside of 109%. Motilal Oswal indicates that Kaynes Technology will benefit a lot from government approvals for its advanced circuit board manufacturing project. his unit is located in Tamil Nadu. It entails investment of Rs 3,700 crore and can push the company towards self sufficiency in critical high-tech materials. It could cut down costs and help long-term growth as the company expands its industrial and smart meter business. “Kaynes has received government approval and a capital subsidy under the PLI scheme for the second phase of its advanced PCB manufacturing project near Tuticorin, Tamil Nadu,” the brokerage mentioned in the note.
Dixon Technologies
Target price: Rs 22,500
Market price: Rs 10,360 (closing price of Feb 25)
The target price is set at Rs 22,500 signals an upside potential of about 115%. Dixon Technologies is entering new new partnerships for mobile phones and premium lighting products. Dixon is also focusing on manufacturing their own components such as camera modules and displays. This strategy will allow it to improve their profits margins. Motilal Oswal thinks strategic JVs for IT hardware and robotic vacuum cleaners can improve the scale of operations in future.
Syrma SGS Technology
Target price: Rs 1,000
Market price: Rs 837 (closing price of Feb 25)
The target price of Rs 1,000 implies a potential upside of slightly less than 20%. Motilal Oswal highlightes that Syrma SGS Technology is graduating from just assembly to profitable sectors such as medical devices and defense electronics. Syrma SGS Technology is also close to completing their manufacturing base in Andhra Pradesh. It is reportedly getting positive feedback from large customers. Motilal thinks the strategy will enhance the firm’s margins as since it will gradually turn away from lower-margin consumer products by the end of FY26. “Syrma has shifted its focus from being a traditional EMS assembler, and it is targeting high-margin sectors such as smart energy meters, solar trackers, automotive EV chargers,” Motilal stated.
Avalon Technologies
Target price: Rs 1,330
Market price: Rs 982 (closing price of Feb 25)
The target price of Rs 1,330 signals a an upside of 35% from the present level. Motilal Oswal has said that Avalon Technologies has tied up with a global semiconductor equipment maker to build complex systems and it could turn into a growth driver beginning FY27. The firm is also progressing in manufacturing parts for satellite communication systems. “Notably, Avalon has entered into a partnership with a leading global semiconductor equipment manufacturer to produce highly complex, Industry 4.0-compliant box-build systems,” the brokerage noted.
Amber Enterprises
Target price: Rs 8,400
Market Price: Rs 8,044
Motilal Oswal has said that Amber Enterprises is expanding its consumer products range to include large commercial air conditioning units of up to 17.5 tons. The company has also picked up majority stake in Power-One which will lend it entry into the market for solar inverters and electric vehicle chargers. Motilal expects Amber Enterprises to graduate into a full provider of industrial electronics and railway equipment. “In the electronics segment, the company acquired a majority stake in Power-One Microsystems, which expands Amber’s presence in solar inverters, EV chargers, and battery energy storage systems,” said the brokerage.
Client DLM
Target price: Rs 550
Market price: Rs 312 (closing price of Feb 25)
Motilal Oswal said Cyient DLM got two new global clients in the medical and industrial motor categories in the Dec quarter. Though recent revenue has dipped a bit, the order book has expanded to Rs 2,350 crore. The brokerage firm thinks the company will perform better in Q4FY26.sense
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