The brokerage Motilal Oswal Financial Services recommends investing in EMS companies, predicting significant growth driven by government initiatives and increasing manufacturing capacity.
The Indian electronics sector is currently experiencing significant activity, particularly in the Electronics Manufacturing Services (EMS) area. The brokerage firm Motilal Oswal Financial Services has released a report identifying various promising stocks, with optimistic growth estimates and new price targets. This report highlights that the government's Production-Linked Incentive (PLI) scheme, along with rising manufacturing capabilities and global companies shifting their operations to India, is expected to drive substantial growth in the sector over the next few years.
The report anticipates a approximately 30% compound annual growth rate (CAGR) in revenues for EMS companies between FY25 and FY28, alongside expectations of 36% growth in EBITDA and over 40% in net profits. The upcoming three years are deemed crucial for the sector's development, attracting attention from investors and stakeholders eager to capitalize on this growth trajectory. The brokerage specifically points to Dixon Technologies as a leading player in the market, assigning it a 'Buy' rating and setting an ambitious target price of ₹22,500, reflecting their confidence in the company's growth potential.
Dixon Technologies has been recognized for its strong positioning in smart technology and consumer electronics, areas that are poised for tremendous expansion. The increasing demand for these products, fueled by the PLI scheme and a supportive governmental framework, indicates a bright future not just for Dixon but for the entire EMS sector. Investors are encouraged to consider this opportunity seriously, as the projections suggest that these companies may achieve exponential growth in the coming years.
