India’s electronics manufacturing sector is poised to capitalize on a transformative phase, driven by shifting global trade dynamics and strategic policy interventions.
As the U.S. recalibrates tariffs on Chinese imports, India is emerging as a credible alternative in electronics production, with immediate opportunities and long-term growth potential.
Over the next 90 days window, India is expected to consolidate its logistics advantage, particularly through Chennai Airport’s rapid customs clearance (as low as four hours), which has enabled swift fulfilment of U.S. orders until May.
While bulk exports to the U.S. have already peaked, the focus now lies on securing a bilateral trade agreement to lock in tariff advantages. Diplomatic agility will be critical to outpace competitors like Vietnam and Mexico.
Beyond 2025, India’s Production-Linked Incentive (PLI) schemes for components and sub-assemblies—such as display modules, camera modules, and PCBs—are set to accelerate investments.
These segments, which can scale within 3-6 months, will form the backbone of India’s integration into global value chains. While complex components (e.g., semiconductors) may take longer, the government’s proposed Semicon 2.0 policy signals a commitment to high-tech manufacturing.
Global firms like Apple and Samsung are expanding their Indian operations beyond assembly to comprehensive supply chain hubs.
However, India must address regulatory bottlenecks and improve ease of doing business to sustain this momentum. Geopolitical tensions have made supply chain diversification “non-optional” for U.S.-focused companies.
India’s tariff advantage over China and a vast domestic market provide a dual growth engine. Yet, competition from Southeast Asia and Mexico demands swift action.
The sector is projected to grow from USD 140 billion today to USD 500 billion by 2030, with mobile phones alone targeting USD 100 billion.
With strategic policy alignment, India is well-positioned to harness global supply chain shifts. Immediate gains in components, coupled with long-term semiconductor ambitions, could cement its status as a manufacturing powerhouse.
The trajectory is “up only,” contingent on sustained reforms and strategic trade partnerships. The next 90 days will set the tone, but the decade ahead promises exponential growth.
Dixon Technologies: Buy| Target Rs 20500| LTP Rs 15324| Upside 33%
Dixon Technologies continues to see strong momentum in its Mobile and EMS segments, which are expected to remain the primary growth drivers. The company is witnessing healthy volume growth from key mobile clients, it reported strong 3QFY25 results, with revenue/EBITDA up 117%/112% YoY.
It is actively pursuing backward integration, with display manufacturing likely to commence by 1Q/2QFY26 — a move aimed at mitigating margin pressures following the expiry of PLI incentives.
Dixon is also evaluating opportunities in display fabs under the component PLI scheme, which could support long-term margin expansion.
With a robust PAT CAGR of 60% projected over FY24–FY27, we maintain a positive view on the company, even as we monitor risks related to competition and client concentration.
Kaynes Technology: Buy| Target Rs 6400| LTP Rs 5641| Upside 13%
Kaynes Technology Ltd is expanding into North America, Europe, and South Asia, focusing on ODM and high-margin businesses.
Capex of INR23b for semiconductor projects is supported by government subsidies. Orders from industrials, EVs, aerospace, and automotive sectors are expected to materialize from 4QFY26.
Smart Meters, Railways, and Semiconductor projects (OSAT, HDIPCB) are key growth drivers, with significant revenue contributions from FY26 onwards.
With a projected 56%/62%/68% CAGR in revenue/EBITDA/PAT over FY24-27, we reiterate BUY, citing margin expansion led by increased traction in high-margin verticals.
(The author is Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd.)
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com)
As the U.S. recalibrates tariffs on Chinese imports, India is emerging as a credible alternative in electronics production, with immediate opportunities and long-term growth potential.
Over the next 90 days window, India is expected to consolidate its logistics advantage, particularly through Chennai Airport’s rapid customs clearance (as low as four hours), which has enabled swift fulfilment of U.S. orders until May.
While bulk exports to the U.S. have already peaked, the focus now lies on securing a bilateral trade agreement to lock in tariff advantages. Diplomatic agility will be critical to outpace competitors like Vietnam and Mexico.
Beyond 2025, India’s Production-Linked Incentive (PLI) schemes for components and sub-assemblies—such as display modules, camera modules, and PCBs—are set to accelerate investments.
These segments, which can scale within 3-6 months, will form the backbone of India’s integration into global value chains. While complex components (e.g., semiconductors) may take longer, the government’s proposed Semicon 2.0 policy signals a commitment to high-tech manufacturing.
Global firms like Apple and Samsung are expanding their Indian operations beyond assembly to comprehensive supply chain hubs.
However, India must address regulatory bottlenecks and improve ease of doing business to sustain this momentum. Geopolitical tensions have made supply chain diversification “non-optional” for U.S.-focused companies.
India’s tariff advantage over China and a vast domestic market provide a dual growth engine. Yet, competition from Southeast Asia and Mexico demands swift action.
The sector is projected to grow from USD 140 billion today to USD 500 billion by 2030, with mobile phones alone targeting USD 100 billion.
With strategic policy alignment, India is well-positioned to harness global supply chain shifts. Immediate gains in components, coupled with long-term semiconductor ambitions, could cement its status as a manufacturing powerhouse.
The trajectory is “up only,” contingent on sustained reforms and strategic trade partnerships. The next 90 days will set the tone, but the decade ahead promises exponential growth.
Dixon Technologies: Buy| Target Rs 20500| LTP Rs 15324| Upside 33%
Dixon Technologies continues to see strong momentum in its Mobile and EMS segments, which are expected to remain the primary growth drivers. The company is witnessing healthy volume growth from key mobile clients, it reported strong 3QFY25 results, with revenue/EBITDA up 117%/112% YoY.
It is actively pursuing backward integration, with display manufacturing likely to commence by 1Q/2QFY26 — a move aimed at mitigating margin pressures following the expiry of PLI incentives.
Dixon is also evaluating opportunities in display fabs under the component PLI scheme, which could support long-term margin expansion.
With a robust PAT CAGR of 60% projected over FY24–FY27, we maintain a positive view on the company, even as we monitor risks related to competition and client concentration.
Kaynes Technology: Buy| Target Rs 6400| LTP Rs 5641| Upside 13%
Kaynes Technology Ltd is expanding into North America, Europe, and South Asia, focusing on ODM and high-margin businesses.
Capex of INR23b for semiconductor projects is supported by government subsidies. Orders from industrials, EVs, aerospace, and automotive sectors are expected to materialize from 4QFY26.
Smart Meters, Railways, and Semiconductor projects (OSAT, HDIPCB) are key growth drivers, with significant revenue contributions from FY26 onwards.
With a projected 56%/62%/68% CAGR in revenue/EBITDA/PAT over FY24-27, we reiterate BUY, citing margin expansion led by increased traction in high-margin verticals.
(The author is Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd.)
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com)
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