Jefferies flags Kaynes as top EMS pick as India shifts mobile incentives to components
India’s ₹62,500 crore Mobile Production and Manufacturing Scheme is expected to move the sector beyond final handset assembly toward PCBs and semiconductor packaging. Jefferies forecasts Kaynes’ FY26-FY29 sales CAGR at 30%, versus 19% for Dixon and 42% for Syrma, while favouring Kaynes on PCB and OSAT exposure.
What happened
Dixon Technologies · Jefferies says India’s mobile-manufacturing policy is shifting from final assembly toward locally made components. It prefers Kaynes for
Key facts
- Mobile PLI enabled 99% of phones to be assembled in India
- ECMS incentive outlay: Rs 40,000 crore, increased 75%
- ECMS: 249 applications and 106 approved projects across five tranches
- MPMS outlay: Rs 62,500 crore for FY27-FY31
- Projected cumulative mobile production under MPMS: Rs 39 lakh crore
- Domestic PCB market TAM: about $5 billion; 85-90% of requirements imported
- Dixon FY26-FY29 mobile and EMS sales CAGR forecast: 19%; target Rs 12,730, 10% downside
- Kaynes FY26-FY29 sales CAGR forecast: 30%; target Rs 4,480, 24% upside
- Syrma FY26-FY29 sales CAGR forecast: 42%; target Rs 1,430, 13% downside
Why this matters
The policy-driven push into components creates partnership, acquisition and capacity-expansion opportunities in PCB fabrication, semiconductor packaging and domestic supply-chain integration.
What to watch
- Final MPMS eligibility criteria, incentive rates, localization thresholds and disbursement timeline.
- Kaynes announcements on OSAT/PCB capacity, customer wins, technology partners, utilization and funding.
- Order-book conversion and margin trajectory for Kaynes versus Dixon and Syrma.
- OEM commitments to India-made PCBs, camera modules, mechanics, battery components and semiconductor packaging.
- Evidence that domestic component suppliers meet yield, reliability and cost requirements at scale.
- Changes in import duties, PLI-style support, trade policy or semiconductor-policy incentives.
- Kaynes is likely to prioritize capacity additions, customer qualification and partnerships in PCB, semiconductor packaging and higher-complexity electronics manufacturing.
- Dixon and Syrma may accelerate backward-integration announcements, component joint ventures and capex plans to defend mobile-electronics relevance.
- Global handset OEMs and component suppliers may increase India sourcing commitments to qualify for incentives and diversify supply chains beyond China.
- Investors are likely to re-rate EMS companies based on domestic value-add mix, order-book visibility, utilization and execution on component manufacturing rather than handset assembly volumes alone.