Beyond Dixon: Three Rising Electronics Stocks Demanding Investor Attention

India’s electronics manufacturing sector is riding a powerful tide. Over the past decade, the industry has expanded sixfold — from ₹1.9 trillion in FY15 to ₹11.3 trillion in FY25 — while exports surged eightfold, from ₹380 billion to ₹3.3 trillion. Value‐addition has also jumped from about 30% to 70%, with a target of 90% by FY27. Government incentives like the PLI scheme and the Electronics Component Manufacturing Scheme (₹229.2 billion) are fueling this growth.

While Dixon Technologies is often cited as the flagship of India’s electronics upturn, three other players are quietly scaling up and catching investor focus: Kaynes Technologies, Syrma SGS Technology, and PG Electroplast. Below is a snapshot of each, along with the key opportunities and risks they face.

1. Kaynes Technologies

What they do
Kaynes has evolved from a pure EMS (Electronics Manufacturing Services) provider into a full-fledged ESDM (Electronic System Design & Manufacturing) firm. It offers design, process, engineering, integrated manufacturing, and life-cycle support to OEMs. Its customers range across automotive, aerospace, defence, and railways.

Strategic bets & growth drivers

• Kaynes is entering the OSAT (Outsourced Semiconductor Assembly & Test) and HDI PCB (high density interconnect printed circuit board) space. Its OSAT facility in Gujarat carries an estimated investment of ₹34 billion (with government support).
• It has secured several clients, including international ones, and has MoUs with others in silicon photonics and advanced packaging.
• Geographically, the company has acquired August Electronics in Canada and is eyeing expansion in North America.
• In new verticals:
   • In rail: acquired Sensonic and invested in a rail-ODM entity.
   • In defence: upped its participation, securing orders including a US$10 million contract.
   • In EV / automotive: works with large two-wheeler OEMs and is involved in upcoming 4-wheeler projects.
   • In smart meters: targeting ~15% of the market, which could translate to ₹10–12 billion annually.

Financial & valuation picture

• In Q1 FY26, revenue rose ~34% YoY to ₹6.7 billion; net profit jumped ~47% to ₹746 million. Margins expanded ~350 bps to 16.8%.
• Revenue mix: 45% from PCBA, 36% from product engineering & IoT, 19% from “box build.”
• Industrial & EV segments contribute ~59% of sales, automotive ~27%, IoT ~5%, and railways ~7%.
• Order book stands around ₹74 billion, giving over two years of revenue visibility.
• Kaynes is trading at a P/E multiple of ~154× — above its 3-year median of 120× and far above the industry median ~35×.

Key risks / points to watch

• Execution risk in nascent lines (OSAT / HDI)
• Managing capital intensity and cash flows
• Sustaining margin expansion under scale

2. Syrma SGS Technology

What they do
Syrma’s strength lies in comprehensive EMS solutions, including PCBA, box builds, and end-of-line tester development. It has a presence in niche, high-value segments — notably in RFID tagging and critical communications for sectors like healthcare, public safety, oil & gas, and electromechanical devices.

Recent performance & strategic reorientation

• In Q1 FY26, revenue slipped ~18.5% YoY to ₹9.5 billion, primarily due to a drop in its consumer vertical.
• However, operational metrics improved sharply: EBITDA surged ~69.3% to ₹1 billion (margin ~10.7%), and PAT jumped ~145.4% to ₹499 million.
• Order book ~₹55 billion, giving ~1.5 years of visibility.
• The company is deliberately reducing reliance on its low-margin consumer business and shifting toward high-margin verticals such as automotive, industrial, healthcare, medical devices, and railways/IT.
• Gross margin has risen from ~15.5% (Q1 FY25) to ~25.4%; EBITDA margins have improved as well from ~4.7% to ~10%.

Future ambitions & challenges

• Planned capex: Establishing multi-layer and single-layer PCB plants. First phase of capex ~US$91 million, with ~40% subsidy expectations from states.
• Trial production expected by Q3 FY27; full ramp-up by Q1 FY28.
• Valuation: trading at ~79× P/E — above its 3-year median ~71.8× and well over industry median ~35×.
• Challenges: timing of capacity scaling, demand predictability, and managing working capital under transitions

3. PG Electroplast

What they do
PG Electroplast is a leading EMS player specializing in PCBs and plastic components / molding. Their products serve consumer electronics (AC, coolers), automotive, and home appliances. They are among the key beneficiaries of India’s PLI scheme, particularly in the AC components segment, which has fueled rapid expansion.

Financials & growth outlook

• In Q1 FY26, revenue increased ~13.9% YoY (~₹15 billion), while EBITDA rose ~3.6% (~₹1.4 billion). But PAT fell ~21.4% to ₹667 million due to operating deleveraging and input cost pressures.
• For FY26, PG expects revenue growth of 17–21%, but modest PAT growth (mid-single digits) due to headwinds.
• It plans to invest ₹7–7.5 billion — slightly lower than previous guidance — to preserve cash flow and account for delays in equipment orders.
• Over the long term, PG sees strong demand potential in its end markets (especially as penetration remains low) and aims to improve efficiency, profitability, and cash flow.
• Its internal target: Achieve revenue ~₹90 billion by FY28, with margins near FY25 levels, driven by high asset turnover (~4.5×–5×) on a fully ramped base.
• Valuation: trading at ~53.9× P/E, roughly in line with its 10-year median (~55.8×) but above industry norm (~35×).

Risks

• Demand cycles in consumer durables and seasonal weakness
• Execution of expansion plans amid capital constraints
• Margin pressures from costs, supply chain, and shifts in product mix

Final Thoughts

India’s electronics manufacturing narrative is no longer just about contract assembly. The focus is shifting up the value chain toward integrated capabilities: design, components, packaging, and system-level integration. The Financial Express

While valuations for Kaynes, Syrma, and PG Electroplast already reflect a degree of optimism, the medium-to-long term growth runway remains promising. Key levers will include: export momentum, import substitution, technology localization, and consistent execution.

Investors should watch closely for margin trends, order book conversions, capital expenditure discipline, and how these companies handle scaling complexity. If these three can deliver, they could become some of the next marquee names in India’s electronics ascent.