India's Electronics Manufacturing Industry: A Decisive Decade Ahead

Technology is changing gadgets for everyday use. A remote control used to change channels; now it controls TVs, ACs and smart bulbs. Phones turned into cameras. A watch turned into a health monitor. All appliances are becoming intelligent. While digitalisation increases, theelectronicswithin our products must do the same. India cannot continue to merely import components and needs to develop a local manufacturing base. At the center of this transition is the Production Linked Incentive Scheme (PLI) — the lynchpin of the government’s approach to make India a manufacturing superpower of the world on the one hand and induce innovation, efficiency and competitiveness on the other. In a fierce bid to spur industrial growth, the government drastically raised budgetary allocations for PLI in 2025-26. For electronics andinformation technologyhardware, the allocation was raised from Rs 5,777 crore (revised estimate 2024-25) to Rs 9,000 crore. The action reflects India’s desire to enhance domestic manufacturing. Mass manufacturing of electronics (LSEM) has bloomed: local production of mobiles increased from 5.8 crore units in 2014-15 to 33 crore units in 2023-24, while imports decreased substantially. Exports also stood at 5 crore units, and foreign direct investment (FDI) rose by 254 %. This proves how PLI is not theoretical but bringing manufacturing and investment returns. This is a crucial moment because the electronics manufacturing environment is at a tipping point. Smartphone, consumer electronics, IT hardware,EVelectronics and automation demand are all coming together at the same time. It’s an uncommon window of opportunity for expansion. We have chosen players that best embody India’s Electronic Manufacturing Services (EMS) shift. These five are heavily engaged in electronics value-addition in smartphones, consumer electronics, IT hardware, industrial automation and EVs. They have robust original equipment manufacturers (OEMs) relationships, stable financials and good order visibility. Above all, they are adding capacity and investing in cutting-edge manufacturing — enabling India to localise more pieces and ascend the value chain in electronics. Several players participate in the EMS narrative, but these five best encapsulate it as India enters a high-growth period in FY26 and thereafter. Dixon Technologies (India), incorporated in 1993, is an EMS company with operations in the electronic products vertical such as consumer electronics, lighting, home appliance, closed-circuit television cameras (CCTVs), and mobile phones. Dixon Technologies saw robust momentum in its electronics manufacturing services segment in the July-September quarter (Q2 FY26) due to growth in smartphones, telecommunication equipment and IT hardware. Dixon is constructing an anchor customer’s 1 million square feet mobile campus in Noida, which is expected to be completed by March 2026. A new joint venture with Longcheer is set to commence operations by April 2026, and JV approvals with Vivo and HKC for display modules are on track. The company is also going deeper into localisation in critical components. It recently bought a 51% stake in QTech India to make camera and fingerprint modules. Dixon is planning to increase smartphone camera module volumes from around 40 million units a year to up to 190–200 million units in two to three years, with potential revenues ranging from Rs 6,000–7,000 crore. The endeavor will also go into automotive camera modules. Dixon regards telecom as a second growth driver, backed by a contract from an American customer to manufacture backhaul microwave radios for the domestic and export markets from early 2026. IT hardware manufacturing has picked up for HP and ASUS, and the JV with Inventec will start production next fiscal. Management indicated backward integration into display, camera modules and other products is likely to underpin margin enhancement over the medium term. In the past one year, Dixon Technologies share price is up marginally by 2.9%. Dixon Technologies 1 Year Share Price Chart Incorporated in 2004,Syrma SGS Technologyis a Chennai-based engineering and design company engaged in electronics manufacturing services (EMS). The company provides integrated services and solutions to original equipment manufacturers (OEMs) from the initial product concept stage to volume production through concept co-creation and product realisation. Syrma SGS Technologies is building a stronger position in India’s electronics manufacturing value chain as it focuses on high-margin verticals and deeper localisation. The company continues to invest in more profitable ventures and increasing local production. As of June 30, 2025, the firm had an order book of Rs 5,400–5,500 crore, with auto contributing 35–40% and industry another 25–27%. Management anticipates these segments to fuel growth during FY26, led by increased demand from EVs, industrial automation and global sourcing changes. The company is going through a significant change by entering printed circuit board (PCB) manufacturing through a joint venture. PCBs are at the heart of the EMS value chain as they contain and interconnect all the active elements in electronic products. Yet, India still imports close to 90% of its PCB needs. Syrma is seeking to fill that gap with a $91 million Phase-1 investment to produce 1.5–2 million sq. metres of PCB capacity every year for automotive, industrial and consumer use. Land options have been carefully considered, and the execution is anticipated to start in Q2 of FY26. Using a Korean technology supplier, production at this plant is planned for late FY27 or early FY28. Margins are increasing as the transition towards automotive, industrial and exports picks up speed. Management reaffirmed belief in the delivery of its FY26 growth milestones, underpinned by robust customer additions and rising utilisation at recently commissioned factories. In the past one year, Syrma SGS Technology share price has rallied 60.6%. Incorporated in 2008,Kaynes Technology Indiais a leading end-to-end and IoT solutions-enabled integrated electronics manufacturing company. The company provides conceptual design, process engineering, integrated manufacturing, and life-cycle support for major players in the automotive, industrial, aerospace and defense, outer-space, nuclear, medical, railways, Internet of Things (IoT), Information Technology (IT) and other segments. Kaynes Technology India is building scale in the electronics manufacturing services industry with robust traction in automotive, industrial, EV and rail electronics. The company had an order book of Rs 7,401 crore as of 30 June 2025. According to the management, execution will be much higher from the second quarter onwards, supported by new program ramp-ups and additions of customers in EV two-wheelers and aerospace electronics. Kaynes is shifting from being a pure-play EMS provider to a total electronic system design and manufacturing (ESDM) player. Its key backward-integration ventures are entering the operating phase. Sanand OSAT unit will ship prototype shipments during this year and commence commercial billing by Q4 FY26, backed by three global customers in the U.S., Europe and India. The Chennai-based multilayer PCB manufacturing facility for HDI is completing the final construction phases with operating readiness planned for January 2026.Railways is turning into an additional growth driver, with Kavach railway safety signalling system ready for pilot deployment. Margin expansion is anticipated to be sustained by management through operating leverage, improved contribution from ODM products and greater localisation. In the past one year, Kaynes Technology India share price has surged 30.2%. Incorporated in 1999,Avalon Technologiesis a leading fully integrated EMS company with end-to-end capabilities in delivering box-build solutions, focusing on high-value precision-engineered products. Avalon Technologies is increasing its foothold in the electronics manufacturing services space, backed by demand across industrial, mobility, clean energy and communication verticals. The company delivered across-the-board growth and reaffirmed its guidance to double revenue over FY24 to FY27, underlining belief in a sustained order book. Avalon’s order book as of 30 June 2025 was Rs 1,790 crore with an average execution cycle of 14 months, in addition to Rs 1,157 crore of longer-term contracts up to 36 months. One key strategic milestone is its entrance into semiconductor equipment manufacturing, where Avalon is developing extremely complex box-build systems for a top-tier global OEM. Prototype development has commenced and production will accelerate over the next four to five quarters, making this vertical a future growth driver. To fuel new program wins on rail, aerospace and clean energy, the firm is ramping capacity at its India and U.S. plants. Phase-2 of its Chennai expansion will be done by Q3 FY26, while the Kavach railway safety system is in final approval stages prior to commercial launch next year. Management indicated capacity investments are back-ended, with operating leverage helping strengthen margins in H2 FY26. In the past one year, Avalon Technologies share price has rallied 102.7%. Incorporated in 1982,Elin Electronicsis in the business of EMS. Elin Electronics is rapidly expanding electronics manufacturing services (EMS) business. It is increasing capacity and capabilities across different segments of consumer durables. The company earned 76.4% revenue from EMS in FY25. The company’s diverse product mix across LED, fans and home appliances helped boost expansion. Growth in demand for energy-efficient products assisted in deepening traction in BLDC fans and mid-range kitchen appliances. The company is working to improve its operational leverage through a new greenfield facility in Bhiwadi, its first major expansion in two decades. With an investment of ₹90–100 crore, the unit is aimed at high-volume appliances, backed by automation and greater vertical integration. Management views India’s rapidly growing digital economy and global supply chain diversification as solid tailwinds for local EMS providers. With brands increasingly localising production, Elin anticipates strengthening customer relationships and capturing greater value in high-demand segments. The company is poised for continued growth with multi-facility manufacturing in Uttar Pradesh, Himachal Pradesh and Goa. In the past one year, Elin Electronics share price is up marginally by 2.6%. Let’s now turn to the valuations of the EMS companies in focus, using the Enterprise Value to EBITDA multiple as a yardstick. Across most names on the table, valuations remain steep. Dixon trades at more than double its sector median, supported by scale, high customer stickiness, and industry-leading returns of 40%. Syrma and Avalon also command large premiums, reflecting optimism around their expanding export portfolios and complex box-build offerings. Kaynes stands out with a sky-high multiple industry median — a valuation that already discounts its rapid diversification into semiconductor packaging, design-led manufacturing, and defence electronics. Elin is the lone exception, trading at ratio lower than its median, as its modest 7% ROCE keeps investor expectations subdued. The key question for investors is how much future expansion — from localisation, EV electronics, telecom and IT hardware — is already priced in. High multiples can be justified when industry structure improves and profitability expands. But when deal flows, utilisation gains and supply-chain shifts slow down, valuation comfort becomes critical. In a market where optimism is high, opportunities lie where execution strength meets reasonable pricing — and where growth ahead is not fully baked into today’s stock price. India’s electronics manufacturing journey has entered a decisive decade. The rise of smartphones, connected homes, EVs and automation is not slowing down anytime soon. The policy push through PLI and higher domestic value addition has created an opening that India has waited for — the opportunity to become a true global electronics hub. EMS companies like the five we discussed are not just participating in this shift. They are shaping it. They are adding capacity, integrating backward and building long-term partnerships with both domestic and global brands. Their role is expanding from assembly lines to advanced design and critical components. But strong stories also attract strong valuations. In many cases, the market is potentially already pricing in a big part of the growth ahead. That means investors must be selective. Execution strength, cost efficiency, and sustainable margins will separate the winners from the rest. The sector offers exciting prospects. Still, a mindful investment demands a comprehensive evaluation of fundamentals, valuations, and risk factors before taking any exposure. India’s manufacturing upgrade is real and underway — and the gains will likely flow to companies that can scale with discipline and innovate with purpose. Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information. The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only. Ekta Sonecha Desai has a passion for writing and a deep interest in the equity markets. Combined with an analytical approach, she likes to dig deep into the world of companies, studying their performance, and uncovering insights that bring value to her readers. Disclosure: The writer and her dependents do not hold thestocks discussed in this article. The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.