Insights from the CII Electronics Summit underscore significant opportunities in the electronics and semiconductor markets, particularly in component manufacturing, automotive electronics, and emerging technologies.
With sustained government and private sector efforts, the sector is poised for long-term sustainable growth.
India’s total electronics production is projected to grow at a robust CAGR of 26% between CY23-30, reaching USD 500 billion.
This includes USD 350 billion from finished goods and USD 150 billion from components. India is emerging as a preferred global destination for electronics manufacturing due to increasing assembly activities and unprecedented demand in the EMS sector, particularly in mobile phones, automotive, and industrial segments.
Key policy initiatives, such as the Production Linked Incentive (PLI) scheme and the recently proposed PLI for components, are expected to offset cost disabilities and promote domestic manufacturing of high-priority components like PCBAs, batteries, displays, and enclosures.The automotive electronics market, currently valued at USD 10.6 billion, is projected to grow to USD 74 billion by FY32, driven by rising demand for electric vehicles (EVs) and advanced automotive systems.The electronic content in vehicles is expected to increase from 20% to 40-50% over the next decade. Companies such as Amber Enterprises, Dixon, Kaynes, and Syrma are already capitalizing on this shift by expanding capacities in automotive and EV electronics.
Electronics companies present a unique investment proposition with their transition from assemblers to full-service ODMs and their emphasis on innovation, sustainability, and ESG compliance.
This evolution enables these firms to attract substantial capital market investments. Players such as Dixon and Amber Enterprises are at the forefront of these developments, diversifying their offerings and scaling operations to meet growing domestic and export demand.
Despite the promising growth trajectory, challenges remain in indigenous R&D and design capabilities, particularly in critical components like PCBs, displays, and sensors.
To bridge this gap, the government has exempted imports for R&D/testing from CRO requirements and introduced programs like Semicon India, SPECS, and EMC.
These initiatives aim to strengthen domestic technological know-how and reduce import dependency. India’s electronics manufacturing sector is well-positioned to capture global opportunities.
With robust policy backing, expanding markets, and technological investments, the industry is set to thrive as a cornerstone of India’s economic growth.
Amber Enterprises: Target Rs 7350| LTP Rs 6064| Upside 21%
Amber is poised for strong growth, supported by rising AC demand, strategic EMS and PCB expansions, and non-RAC opportunities.
We anticipate accelerated expansion in this segment due to the JV with Korea Circuits and capacity increases at Ascent Circuit. We estimate revenue/PAT to grow at 26%/63% CAGR over FY24-27, driven by new clients and government policy support.
Kaynes Technology: Target Rs 6600| LTP Rs 5984| Upside 10%
Kaynes is set for robust growth, driven by a strong order book of INR54.2b, rising traction in high-margin verticals like smart meters and EVs, and expanding export contributions.
With ambitious plans to surpass INR30b in revenue for FY25 and reach around USD1b by FY28, KAYNES is well-positioned for growth. We project a 57%/64%/72% CAGR in revenue/EBITDA/Adj. PAT over FY24-27.
(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)
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