Jefferies has expressed optimism about the outlook for India’s electronics manufacturing sector following the government’s approval of a ₹229 billion (~$2.7 billion) Production-Linked Incentive (PLI) scheme aimed at accelerating component manufacturing. The scheme will run for six years (with a one-year gestation period) and targets enhanced backward integration and value addition, specifically focusing on sub-assemblies, bare components, and the broader supply chain ecosystem.
The government’s ambition to double India’s electronics manufacturing output, currently at $120 billion, is expected to be driven by a stronger domestic components base.
In this context, Jefferies has maintained Buy ratings on Amber Enterprises and Kaynes Technology, highlighting their exposure to high-margin, component-focused segments that align well with the scheme’s objectives. These companies are expected to be key beneficiaries of the government’s push toward deeper localisation and higher value addition.
On the other hand, Jefferies remains cautious on Dixon Technologies, retaining an Underperform rating, pointing out that over 80% of its revenue mix is currently tied to low-margin OEM businesses, which may not benefit as significantly from the component-focused incentives.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a qualified financial advisor before making any investment decisions.
