Dixon, Syrma earnings send shares of other EMS stocks higher

Shares of EMS companies including Amber Enterprises, PG Electroplast and Kaynes Technology extended gains on Friday, January 20, riding on strong earnings from Dixon Technologies and Syrma SGS Technology that lifted sentiment across the space.

Dixon Technologies reported a largely in-line quarter on revenue and margins, while profit after tax beat expectations due to a one-off item.

Mobile revenue surprised positively with a 5% YoY rise despite weaker volumes, against expectations of a decline.



Margin performance also improved, with expansion of 10-130bps YoY across segments.

Management said approvals for Vivo PN3 are expected soon and indicated that ECMS approvals for camera and display modules could also come through shortly.

Syrma SGS Technology, meanwhile, delivered a strong earnings beat, exceeding Street estimates on both revenue and margins.

Revenue rose 45% YoY and 10% QoQ, driven by broad-based growth across segments. Export revenue, which forms 26% of the mix, grew 24% YoY.



EBITDA margin expanded sharply to 12.6%, up 350bps YoY and 250bps QoQ, aided by operating leverage, even as the quarter included an exceptional expense of ₹3.3 crore linked to the labour code.

Growth remained evenly distributed across verticals, with no major change in business mix. Automotive revenue grew 44% YoY, consumer electronics rose 43%, industrial segment revenue increased 45%, healthcare climbed 48%, while IT and railways posted a 65% YoY jump.

The company said EMS demand continues to see strong traction across both domestic and export markets and reiterated its confidence in growing in line with industry trends.

Morgan Stanley maintained an 'Equal Weight' rating on Syrma SGS with an unchanged target price of ₹712, citing a margin-led earnings beat.

The brokerage pointed to strong export momentum and mix benefits, though cited higher working capital intensity and said acquisitions and PLI approvals remain key monitorables.

Dixon Technologies shares were trading 3.09% higher at ₹10,656. Kaynes Technology was up 2.47% at ₹3,486.60, while Amber Enterprises jumped 5.20% to ₹5,835.50. PG Electroplast rose 5.55% to ₹558.15.