According to Motilal Oswal Financial Services, the EMS sector continues to benefit from strong order inflows across high-margin segments including defense, aerospace, automotive, telecom, and clean energy. The sector's aggregate order books have grown 25% year-on-year in FY26 to ₹20,500 crore, as reported by NDTV Profit. Despite facing cost pressures from higher prices of memory, commodities, labor, and logistics, companies have largely mitigated the impact through pass-through mechanisms and operational efficiencies.
Looking ahead, Motilal Oswal estimates a 31% compound annual growth rate in aggregate revenue of its EMS coverage companies over FY26-28. This growth is expected to be driven by robust order flows, healthy demand, capacity additions, ramp-up of existing and new plants, and development of new products across key industry verticals. The brokerage believes the EMS sector will maintain its earnings growth momentum, underpinned by rising domestic and global demand that will fuel a healthy order pipeline and capacity addition in the long run.
The brokerage has reiterated Buy ratings on six EMS companies with specific target prices. Kaynes Technology receives a target price of ₹4,000, while Avalon Technologies is set at ₹2,050. Cyeint DLM has a target price of ₹560, Syrma is assigned ₹1,620, and Dixon Technologies carries a target price of ₹14,600. Additionally, Amber Enterprises receives a target price of ₹8,450. Motilal Oswal maintains a Neutral stance on Data Patterns with a target price of ₹3,980.
