India’s EMS Surge: Beyond Dixon—Identifying Emerging Leaders in a $1 Trillion Opportunity

The electronics manufacturing sector (EMS) output is expected to reach ₹27.7 lakh crore by FY2028, growing from ₹8.4 lakh crore in FY2023 at a CAGR of 27%. Multiple factors contribute to this expansion, including increased electronics penetration across sectors and strategic policy support. Notably, exports are forecasted to grow at a staggering 43.9% CAGR, reaching ₹10.8 lakh crore, while imports are expected to decline from ₹2.4 lakh crore to ₹1 lakh crore. While the indication is a structural shift toward domestic value addition, it is time to look beyond Dixon Technologies.

Decoding India’s EMS Surge

Incentive Scheme

Among many factors, the Production Linked Incentive (PLI) scheme and the Electronics Components Manufacturing Scheme (ECMS) have helped in the EMS expansion. PLI disbursements are expected to cover 60–65% of project costs in high-density interconnect printed circuit board (PCB) and semiconductor packaging units.

Additionally, EMC 2.0 provides up to 75% financial assistance for common facility centres. These schemes have attracted over ₹9,000 crore in capex commitments between FY25–FY28, up from ₹5,800 crore in FY23–FY25. The policy also includes customs duty hikes on imports and tax concessions under CRoIT and RoDTEP.

China+1 Strategy

India’s EMS exports are forecasted to triple to $83 billion by 2030, growing at a 24% CAGR, as global firms diversify away from China. The country’s share in global trade is expected to rise to 2.8% by 2030, with electronics leading the charge.

Geopolitical realignment, rising labour costs in China, and India’s stable policy climate are supporting the export growth. EMS firms are increasingly winning high-margin export contracts, especially in automotive, industrial, and medical electronics.

Consumption Trends

At a CAGR of 14.6%, Indian electronic consumption is expected to hit ₹17.9 lakh crore by FY28, up from ₹9.1 lakh crore in FY23. Key drivers include rising discretionary spending, urbanisation, and digital adoption.

Old numbers from 2022 reveal that, at a CAGR of 15%, India reached an internet subscriber base of 850.95 million. These numbers further create a sustained demand for EMS services.

Technology Depth

India’s EMS firms are transitioning from low-margin PCB assembly to high-value services like system integration, product design, and testing. This shift is evident in vertical specialisation: industrial, medical, and aerospace electronics are driving 32% CAGR growth over CY21–26. Firms are investing in high-mix, low-volume manufacturing and clean energy systems, with some targeting 20–45% revenue CAGR over FY23–26. The move toward original design manufacturer (ODM) capabilities and embedded design services is enhancing margins and client stickiness. Strategic partnerships with Korean and Italian firms are enabling access to advanced PCB technologies.

Funding Strategy

EMS companies have raised over ₹6,800 crore through qualified institutional placements (QIPs) and private equity between FY23–FY25. What are they doing with these funds? These proceeds will be used to support backward integration and capacity expansion. Funds will be allocated towards semiconductor packaging (known as OSAT), multi-layer PCBs, and display module assembly.

One firm secured ₹1,800 crore from PE and ₹1,000 crore via QIP in September 2025, while another raised ₹3,000 crore across two QIPs. The capital intensity of these projects implies near-term pressure on return ratios, with revenue realisation expected post-FY27. Investors should track debt repayment schedules and subsidy disbursement timelines to assess balance sheet growth.

Valuation Metrics

Differences in the valuing of EMS firms are reflective of their strategy or positioning. Price-to-earnings (P/E) multiples range from 22x to 48x for FY27 EPS, with some companies trading at below-average valuations.

Entry points also vary. Some firms with high export exposure and niche verticals are trading at moderate valuations, while those with aggressive capex plans show increased multiples.

Revenue Growth

Excluding the largest incumbent, EMS firms posted a 57% YoY revenue growth in FY24, driven by a 44% YoY increase in order inflows. The order book-to-bill ratio has remained stable at 1.8x for three consecutive quarters, indicating strong visibility. Notably, some players recorded 2.1x YoY growth in order inflows, with significant traction in aerospace, EVs, and industrial robotics. This momentum is supported by both domestic OEMs and global clients, with new verticals like clean energy and rail systems contributing to diversification.

Companies to Keep an Eye On

Beyond Dixon Technologies, investors should track Kaynes Technology, Syrma SGS, and Amber Enterprises. Kaynes is evolving into a full-spectrum electronics system design & manufacturing (ESDM) provider, with a focus on IoT and defence verticals. On the other hand, Syrma SGS can drive the momentum by leveraging industrial and automotive demand. Amber, with HVAC and appliance integration, benefits from import substitution. All three are PLI beneficiaries, expanding capacity and margins amid rising domestic value addition.

Conclusion

India’s electronics manufacturing services (EMS) sector seems to be moving into an inflection point, with significant policy backing, diversification, and technological advancement. With deeper manufacturing and tighter export growth, the Indian electronics manufacturing sector’s focus may gradually shift from prominence on volume growth to value and new products. While the story unwinds with new players besides Dixon, we will see if they are well-positioned to add capacity, secure margins, and create subsidies that enable growth. For now, the momentum gives a broad vision of India’s evolving role in the worldwide electronics manufacturing services sector.

Sources

Hindu Businessline
The Financial Express
EY
Aranca
PricewaterhouseCoopers
Motilal Oswal
The Times of India