India’s Electronics Manufacturing Services sector Set for Continued Expansion
New Delhi, 2025-06-28 – India’s Electronics Manufacturing Services (EMS) sector is experiencing substantial growth, fueled by robust order pipelines and increasing global demand. Experts predict this upward trajectory will continue, supported by strategic government initiatives and expanding capacities.
Key Growth Drivers in India’s EMS Sector
The industry is broadening it’s reach across multiple sectors. This expansion is propelled by increased domestic electronics demand, backed by investments in surveillance technology, the burgeoning electric vehicle market, and the proliferation of Artificial Intelligence applications.
Furthermore,the ongoing improvements to India’s infrastructure and rising disposable incomes are contributing significantly to long-term growth.
Pro Tip: Companies focusing on high-margin areas like aerospace and automotive are likely to see even greater returns.
Order Book Surge and Client Acquisition
Order inflows remain strong, driven by new client acquisitions and contracts that enhance profit margins. Conversions from prototype to production are also boosting the sector.Significantly,the cumulative order book for the EMS space (excluding Amber and dixon) jumped by 23% year-over-year in FY25,reaching INR 163 billion.
Government support and Global Integration
Government initiatives such as the Production-Linked Incentive (PLI) scheme and the Electronic component Manufacturing Scheme (ECMS) are instrumental in attracting investments. These schemes bolster key areas like semiconductors and display modules.
The growing participation of both global and Indian players is strengthening the local value chain, creating a more competitive and dynamic habitat.
Capacity Expansion and Margin improvements
EMS companies are actively scaling up their operations to meet the escalating demand. This includes establishing new plants, export-oriented units, and notable investments in areas like Outsourced semiconductor Assembly and Test (OSAT) and High-Density Interconnect (HDI) PCB manufacturing.
These strategic moves are designed to cater to the growing needs of regions like Europe, the Gulf Cooperation Council (GCC), and North America, while concurrently expanding product offerings.
The majority of players in the EMS sector reported improved profit margins in FY25, a trend that is expected to continue, enhancing the predictability of earnings.
Stock recommendations: Kaynes Technologies and Avalon technologies
Analysts are closely watching key players in the EMS sector, offering buy recommendations based on strong growth potential.
- Kaynes Technologies: Poised for significant growth, targeting INR 45 billion in revenue for FY26. Focus is on high-margin new orders and expansions in automotive,aerospace,industrial,and medical sectors.
- Avalon Technologies: Expected to see strong long-term revenue growth,backed by new customers in the US and India,and strategic collaborations.Management projects 18-20% revenue growth in FY26.
Table: Key Financial Projections
| Company | Advice | Target Price (INR) | Current Price (INR) | Upside Potential |
|---|---|---|---|---|
| Kaynes Technologies | Buy | 7300 | 5770 | 26% |
| Avalon Technologies | Buy | 1030 | 828 | 24% |
Did You Know? The Indian government aims to make India a $300 billion electronics manufacturing hub by 2026.
The Road ahead for Electronics Manufacturing Services
The EMS industry is firmly on a growth trajectory, propelled by favorable market dynamics, increasing exports, and deeper domestic integration. With a supportive policy environment and expanding capacities, the sector is well-positioned to sustain its growth momentum in the coming years.
what innovative technologies do you think will drive the next phase of growth in the EMS sector? How can India further strengthen its position in the global electronics supply chain?
The Evergreen Potential of India’s EMS Sector
Beyond the immediate growth projections,India’s Electronics Manufacturing Services sector holds significant long-term potential. Factors such as a large domestic market, a growing skilled workforce, and increasing government support make India an attractive destination for electronics manufacturing.
The focus on higher-margin segments like aerospace and medical devices will further enhance the sector’s profitability and resilience. Continuous investment in research and advancement, coupled with strategic international partnerships, will be crucial for sustaining growth and maintaining a competitive edge.
Frequently Asked Questions About Electronics Manufacturing Services in India
- What is driving the growth of the Electronics Manufacturing Services (EMS) sector in India?
The Growth Is Fueled By Strong Order Pipelines, Capacity Additions, Increasing Global Relevance, Rising Investments In Surveillance, The Evolution Of Electric Vehicles And Ai, Infrastructure Upgrades, Low Penetration Of Consumer Electronics, And Rising Income Levels. - What Government Initiatives Are Supporting The Electronics Manufacturing Services (EMS) Sector?
Government-led initiatives Like The Production-linked Incentive (pli) And Electronic Component Manufacturing Scheme (ECMS) Are Accelerating Investments In Segments Like Semiconductors And Display Modules. - Which Segments are Witnessing Expansion In The Electronics Manufacturing Services (EMS) Industry?
the Industry Is Expanding Across Various Segments, Including Aerospace, Industrial, Automotive, And Critical Infrastructure, Driven By Rising Work Content And Better Execution Visibility. - how Are Global Players Contributing To The Indian Electronics Manufacturing Services (EMS) Sector?
Increasing Involvement Of Both Global And Indian Players Is Strengthening The Local Value Chain, Fostering Innovation, And Increasing Competitiveness. - What Are The Revenue Targets For Kaynes Technologies In The Coming Years Within The Electronics Manufacturing Services (EMS) Sector?
Kaynes Technologies Is Aiming For Inr45 Billion In Revenue For Fy26, Driven By New Orders And Expansion.They Anticipate Inr25 Billion Revenue In Fy27 And Inr50 Billion By Fy28 From Hdi Pcb And Osat Units. - What Growth Is Expected For Avalon Technologies in the electronics Manufacturing Services (EMS) Sector?
Avalon Technologies Anticipates Strong Long-term Revenue Growth, expecting 18-20% Revenue Growth In Fy26, supported By New Customers, Strategic Collaborations, And Expansion Into Advanced Technology Segments.
Disclaimer: This article provides facts about the electronics manufacturing services sector and related stock recommendations. it is not financial advice. Consult a financial advisor before making investment decisions.
Share your thoughts and comments below! What are your predictions for the future of electronics manufacturing in India?