JP Morgan says 2026 will be a make‑or‑break year for India's electronics manufacturing services (EMS) companies.
Why 2026 matters
After a poor 2025, EMS stocks have lost a lot of value. Investors will only buy again if companies can show better revenue, profit margins and cash flow.
Key triggers for a turnaround
The broker points to three factors that could lift the sector:
- Extension of the mobile performance‑linked incentive (PLI) scheme.
- Implementation of the second phase of the India Semiconductor Mission (ISM 2.0).
- Progress on the India‑US trade agreement.
Broker’s stock picks
JP Morgan rates some EMS firms as “overweight,” meaning they expect them to outperform:
- Syrma SGS Technology
- Kaynes Technologies
- Dixon Technologies
It stays “neutral” on Amber Enterprises and Cyient DLM, and is “underweight” on Avalon Technologies.
Recent performance snapshot
- Kaynes: down 47% in the past year
- Cyient: down 36%
- Dixon: down 29%
- Amber: down 16%
- Syrma: up 20%
- Avalon: up less than 2%
What investors should watch
Keep an eye on earnings reports and any news about the three triggers above. A clear improvement in profits could spark a broader rally in EMS stocks.
Remember, this is perspective, not a prediction. Do your own research before making any investment decisions.