&w=3840&q=100)
JPMorgan sees EMS as 'sunrise sector'; Syrma, Dixon, Kaynes lead the pack
The global brokerage began coverage on Syrma SGS Technology (target: ₹800) and Dixon Technologies (target: ₹17,700), and Kaynes Technologies (target: ₹7,150) with an 'overweight' rating. JPMorgan initiated a 'neutral' rating on Amber Enterprises (target: ₹7,350) and Cyient DLM (target: ₹450), and a 'underweight rating' on Avalon Technologies (target: ₹650).
The EMS sector is expected to sustain its strong growth trajectory, with revenue projected to grow at a compound annual growth rate (CAGR) of 32 per cent over the financial year 2025-30. According to estimates by JP Morgan, EMS is set to expand its share in domestic electronics production to 41 per cent by FY30 from 31 per cent in FY25.
The growth will be supported by rising electronics content in products, the government's 'Make in India' initiative aimed at import substitution, and a global supply chain shift towards India under the China+1 strategy, it said in a report on July 8.
Additionally, two emerging areas, outsourced semiconductor assembly and testing (OSAT) and printed circuit boards (PCBs), offer fresh growth opportunities, JPMorgan added. Exports are also expected to become a key growth driver in the coming years.
JPMorgan's take on EMS stocks
Syrma SGS Technology: The brokerage expects Syrma to deliver the third-fastest revenue growth in its EMS coverage, projecting a 31 per cent compound annual growth rate (CAGR) over FY25-28. Ebitda margins are expected to expand by 70 basis points to 9 per cent by FY28, driven by strong demand in the industrial and automotive segments. The brokerage also expects exports to stage a comeback from FY27, which could further support growth and margins.
While the market appears to have priced in strong mobile growth through FY27, JPMorgan sees further upside from non-mobile segments.
Kaynes Technology: The company is expected to clock the fastest revenue growth in JPMorgan's EMS coverage, at 46 per cent CAGR over FY25-28, achieving its $1 billion revenue target by FY28. Growth is likely to be supported by new contributions from outsourced semiconductor assembly and testing (OSAT) and printed circuit boards (PCB) beginning FY27. The brokerage believes that delivering near-term growth could trigger a re-rating.
Amber, Cyient DLM, and Avalon: The brokerage expressed scepticism over Amber's growth potential due to a shift from air-conditioner assembly to component manufacturing, driven by brand insourcing. Cyient DLM is seen facing growth challenges in FY26 due to a weak order book and a lack of revenue from Bharat Electronics, JPMorgan said. For Avalon, its high export exposure, 57 per cent of revenues, is seen as a risk amid global tariff uncertainties, likely pressuring FY26 performance.
ALSO READ:

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Mint
2 hours ago
- Mint
PM Modi ‘deeply honoured' to attend Maldives' Independence day event: ‘Productive talks with President Muizzu will…'
Prime Minister Narendra Modi on Saturday attended the 60th Independence Day celebrations of Maldives, along with members of his delegation. The event was organised at the Republic Square in Male, where President Mohamed Muizzu and several ministers of the country welcomed PM Modi as the Guest of Honour. After attending the event, PM Modi expressed on X that he was 'deeply honoured' to have witnessed the celebrations. 'The productive talks with President Muizzu will add significant energy to our bilateral relations,' the post read. In another post, he also said that the relationship between the two countries continues to grow and that it is shaped by people-to-people ties and cooperation in various sectors. 'India remains committed to supporting the aspirations of the Maldivian people and to working together for the betterment of our planet,' he added. During the 5-minute event, PM Modi was seen sitting next to Muizzu. The event featured a military parade and cultural performances by children and other artists. The top political and military brass of the Maldives were also present at the event. Members of PM Modi's delegation, including external affairs minister S Jaishankar and foreign secretary Vikram Misri, attended the event too, PTI reported. PM Modi's visit to the island nation marks a significant step towards improving the India-Maldives relations after a brief period of tension as Mohamed Muizzu, known for his 'pro-China' leanings, came to power while running an 'India Out' campaign. He adopted a policy aimed at strengthening relations with China and in a way reducing dependence on India, Mint reported earlier. However, in recent years, bilateral ties have been reset through what experts call a pragmatic approach. Muizzu visited India in October last year, and now PM Modi is on a two-day visit to Maldives. 'The Maldives will not do anything that would harm India's security interests. We value India's role as a close neighbour and friend,' President Muizzu said during the visit, marking a sharp departure from his earlier 'India-Out' campaign.


Time of India
4 hours ago
- Time of India
Muizzu's U-turn: India in, China out? Maldives seemingly pivots again as PM Modi offers big incentives
NEW DELHI: Maldives, which has had a pro-China tilt in the past, seems to be warming up to India with President Mohamed Muizzu praising Prime Minister Narendra Modi as a "wonderful person". Coming from someone who rose to power on an "India Out" campaign, followed by his cabinet colleagues making derogatory remarks against PM Modi, shows a significant shift in the geopolitical dynamics of the Global South. The two leaders held talks on Friday to repair bilateral ties as the also discussions focused on strengthening cooperation in trade, defence, and infrastructure. Strategic U-turn After coming to power by promising to reduce Indian influence and build closer ties with China—including a first state visit to Beijing and agreements for Chinese military assistance—Muizzu now calls India a "trusted friend" and rolled out the red carpet for PM Modi, breaking with protocol to personally receive him at the airport. "He is a wonderful person who is very fond of building relationships between India's neighbours. The Maldives and India have a very good relationship that goes back centuries, and with PM Modi's leadership, cooperation between the two governments is going to be even more prosperous in the days ahead," he said on the last day of PM Modi's trip. What could be the reasons behind change in stance? The Maldivian economy is under severe stress with a substantial budget deficit and dwindling foreign reserves, and the support offered by India is pivotal for Muizzu's government to stabilize finances. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like No One Knew About Her Bags—Now They're Going Viral Handmakers Report Read Now Although Maldives still owes China large debts, New Delhi has emerged as a key partner to avoid potential economic default. During PM Modi's visit, India announced a fresh $ 565 million line of credit (LoC) for the Indian Ocean neighbour and signed an agreement to reduce its annual debt repayment burden by 40%. 'To give a new impetus to our development partnership, we have decided to provide a line of credit of $ 565 million, or approximately Rs 5,000 crore, to Maldives. It will be used for projects related to infrastructure development in line with the priorities of the people of Maldives,' PM Modi said, as he hailed Maldives as a "true friend". India's sustained efforts However, this diplomatic shift hasn't happened overnight, and it certainly can't be attributed to PM Modi's visit alone. Amid early concerns about losing a key ally in the region, India chose restraint over rhetoric. New Delhi maintained steady engagement, with PM Modi being the first world leader to congratulate Muizzu after his election victory. This gesture, combined with consistent diplomatic outreach and sustained economic support, laid the groundwork for rebuilding trust. Back in 2019, India had extended an $800 million Line of Credit (LoC) to the Maldives during the tenure of the pro-India Maldivian Democratic Party (MDP) government. What PM Modi's trip has done, is to bring India's efforts to light, with Muizzu acknowledging it. "We all have seen how India has helped the Maldives in the past, and nobody will doubt how India will be a very crucial partner going forward," he said. "India is one of the major tourism countries that helps the Maldives with tourism. With PM Modi's visit, it is going to increase a lot. I am sure that people-to-people exchange between the two countries will greatly boost because of this visit," he added. Analysts note that Muizzu's pivot is a pragmatic recognition of Maldives' geographic and economic realities—India remains indispensable for trade, connectivity, and tourism. While China's support remains, India's proximity and willingness to provide urgent financial and developmental assistance have proved decisive in influencing Muizzu's recalibration

Hindustan Times
4 hours ago
- Hindustan Times
US trade policy shift: Response to China's resource dominance
In recent years, the dynamics of global trade and economic relationships have undergone significant transformations, particularly in the context of US-China relations. Donald Trump's administration introduced a notable shift in trade policy, reflecting growing concerns over international resource competition. This change marked a departure from past practices, focusing instead on trade as a means to strengthen the American economy in the face of emerging challenges. One of the most pivotal factors in this policy evolution was China's increasing dominance over critical resources, leading to strategic decisions aimed at safeguarding US interests. President Donald Trump's policy shift from aid to trade is significantly driven by China's rapid acquisition of critical resources, although broader economic and strategic objectives also influenced it. FILE PHOTO: U.S. President Donald Trump REUTERS/Evelyn Hockstein/File Photo(REUTERS) Trump's presidency marked a notable pivot in US foreign and economic policy, moving away from providing financial aid to other countries and toward emphasising trade relationships. This America First approach prioritised economic exchanges—such as goods and services—over traditional development assistance, aiming to bolster US economic strength and security. China's growing dominance over critical resources, particularly rare earth minerals, played a key role in shaping this shift. These resources are essential for industries like technology, defence, and manufacturing. For example, China controls a significant portion of global rare earth production, which includes elements vital for a wide range of applications, from smartphones to military equipment. This dominance raised alarms in the US about economic and national security vulnerabilities, as reliance on China for these materials could leave the US at a strategic disadvantage. Trump's administration viewed China's resource control as a threat and responded by leveraging trade as a tool to counter it. The Trump administration's key actions included tariffs on Chinese imports. Trump imposed tariffs on Chinese goods to pressure China into making concessions and to reduce US dependency on Chinese supply chains, including those tied to critical resources. He invoked wartime powers to expand US mineral production, aiming to lessen reliance on China and secure alternative supply chains. The broader trade war with China, which intensified during his presidency, targeted not just trade imbalances but also China's strategic advantages in resource-heavy sectors. These measures were designed to protect US interests by rebuilding domestic manufacturing and reducing vulnerability to China's resource dominance. While China's actions were a major driver, Trump's shift from aid to trade wasn't solely about China. His economic nationalism also focused on reducing trade deficits with multiple countries, not just China. Renegotiating trade deals with allies like Canada and Mexico (e.g., the USMCA). These efforts reflect a comprehensive strategy to prioritise US economic self-reliance and competitiveness, of which countering China was a critical component. The Trump administration's 2025 mineral deal with Ukraine establishes a joint investment fund to tap into the country's $2–15 trillion in critical minerals, like lithium and rare earths, essential for AI, EVs, and defence tech. This agreement, a shift from demanding Ukraine repay $500 billion in US aid, grants the US 50% of future royalties from new mineral licences while supporting Kyiv's economic recovery. In Africa, particularly in the DRC and Rwanda, the US is promoting peace and economic agreements to secure cobalt and coltan, two vital resources for batteries and electronics and aiming to stabilise conflict zones and enable American investment. These deals reflect Trump's transactional approach, prioritising economic leverage over traditional aid, but face hurdles like Ukraine's war-damaged infrastructure and the DRC's ongoing violence, which deter private-sector commitment. The deals aim to counter China's dominance in critical mineral supply chains, reducing US reliance on Beijing for tech and green energy resources while challenging Russia's influence in both regions. In Ukraine, the agreement aligns with Trump's diplomacy to engage Moscow while securing economic benefits, though it risks exploiting Kyiv's resources without firm security guarantees. In Africa, stabilising the DRC could unlock vast mineral wealth, but competition with China's entrenched presence and local corruption complicates execution. Both initiatives signal a broader US strategy to reshape global supply chains and geopolitics, striking a balance between economic self-interest and regional stability; yet, their success hinges on maintaining peace and sustaining investment. Finally, China's rapid takeover of critical resources, particularly rare earth minerals essential for high-tech industries, significantly influenced the shift in US trade policy during the Trump administration. In response to this challenge, Trump implemented trade policies such as tariffs, aimed at levelling the playing field against perceived unfair practices by China, as well as initiatives to boost domestic production and diversify supply chains away from Chinese reliance. This shift was rooted in economic nationalism, prioritising American manufacturing and job creation, while also addressing national security concerns tied to resource dependency. The focus on rare earth minerals highlighted the strategic implications of China's dominance in the global supply of these resources, prompting efforts to reinforce domestic capabilities and establish partnerships with allies. Ultimately, the US approach to China during this period reflected a complex strategy aimed at safeguarding national interests while balancing immediate economic threats and long-term aspirations for a more resilient economy. This article is authored by Pravesh Kumar Gupta, associate fellow (Eurasia), Vivekananda International Foundation, New Delhi.