India’s outsourced EMS market to hit $100Bn
NEW DELHI, INDIA — India’s outsourced Electronics Manufacturing Services (EMS) sector is expected to record a 33% annual growth for the next four to five years, reaching US$100 billion in valuation.
According to an analysis by financial firm Nuvama, the recent entry of EMS firms — like Kaynes Technologies, Syrma SGS, and Avalon Technologies — in the public market sparked investor interest. These firms, having showcased impressive returns post-listing, are bullish about their financial futures.
The Indian EMS market has grown at a 22% CAGR over the past five years, reaching its current US$26 billion valuation. With its anticipated surge, India is poised to become a pivotal player in the global EMS expansion.
Factors such as competitive labor rates, a vast working-age population, strong educational foundations, and manufacturing-friendly policies bolster India’s position in the EMS domain.
Engaged primarily in original design (ODM) and equipment manufacturing (OEM), Indian EMS companies cater to needs ranging from circuit boards to full-scale product assemblies.
While recent EMS stock performances have been commendable, there’s underlying concern regarding their continued stability. Any discrepancies between projected and actual revenues could lead to stock value fluctuations. Yet, the overall market sentiment remains positive about the sector’s long-term prospects.
Drawing a parallel with the specialty chemicals sector, Nuvama underscores the early-stage high-growth potential of EMS stocks. For sustained growth, EMS companies must focus on strategic investments. However, they must be wary of challenges like economic downturns, variable client engagement, and the ever-evolving technological landscape.
