Jefferies has shared its optimistic outlook on the electronics manufacturing services (EMS) sector, citing the ongoing focus on India’s indigenization theme in 2025. The brokerage has highlighted key opportunities and risks for EMS players while maintaining its ratings on prominent stocks in the segment.
Key highlights from Jefferies’ analysis:
- Positive on indigenization:
- Jefferies is bullish on India’s focus on indigenization and backward integration of components, which is seen as a structural growth driver for the EMS sector.
- The brokerage prefers the backward integration theme over prescriptive OEM approaches.
- Top pick in SMID cap:
- Amber Enterprises is Jefferies’ top pick, with a “Buy” rating and a target price of ₹8,840.
- Stock-specific recommendations:
- Amber Enterprises: Maintain Buy, target price at ₹8,840.
- Dixon Technologies: Maintain Underweight, target price at ₹12,600.
- Kaynes Technologies: Maintain Hold, target price at ₹6,950.
- Syrma SGS: Maintain Buy, target price at ₹730.
- Risks for EMS players:
- The sector faces challenges such as demand slowdown, loss of market share for key customers, and supply chain disruptions, which could impact near-term growth.
Jefferies remains confident in the sector’s long-term potential, particularly for companies like Amber Enterprises and Syrma SGS, which are well-positioned to capitalize on India’s EMS growth.
Disclaimer
This article is for informational purposes only and does not constitute investment advice. Readers should perform their own research or consult a financial advisor before making investment decisions.
