India’s Electronics Manufacturing Services (EMS) sector delivered a stellar 30% topline growth in Q3, with contract manufacturers Amber and Syrma significantly outperforming estimates as the industry shifts toward higher-margin industrial and automotive segments, says Praveen Sahay, Lead Research Analyst at PL Capital, talking to ET Now.
Sector Snapshot: Q3 2026
Avg. revenue growth: 30% FY27 PE multiple: 41-43x FY28 PE multiple: 30-33x
The outperformers: Amber and Syrma set the pace
Amber Enterprises: The diversification success story
Amber Enterprises has emerged as a standout performer, delivering results that significantly exceeded both analyst estimates and peer performance. The company’s success story spans multiple business segments, showcasing the strength of its diversified strategy.
Consumer durables division: The core RSC (Room Air Conditioner) contract manufacturing business posted impressive 26-27% growth with notable margin improvement, demonstrating robust demand despite broader consumer weakness in other categories.
EMS expansion: Driven by inorganic expansions, the EMS segment delivered exceptional topline growth while achieving double-digit margins for the first time. Management has guided for sustained double-digit margins going forward, with inorganic acquisitions expected to contribute meaningfully in coming years.
“Growth wise if I look at, way forward Amber looks quite promising,” Sahay emphasized, highlighting the company’s strong positioning across its business verticals.
Syrma SGS: Order book momentum and margin expansion Syrma SGS Technology delivered an impressive quarter that beat expectations, backed by fundamental improvements in business quality and future visibility.
Syrma’s key achievements
Strong quarterly numbers exceeding analyst estimates Order book growth of 10% sequentially, providing revenue visibility Margin guidance upgrade by 100 basis points on improving segment mix Segment shift toward higher-margin industrial and automotive from consumer electronics The strategic pivot toward industrial and automotive segments represents a crucial inflection point for Syrma. These segments typically command premium margins compared to consumer electronics, and their increasing contribution is expected to drive sustained margin improvement over the medium term.
Post-results performance: Syrma’s stock has already experienced a significant runup following the earnings announcement, leaving limited room for immediate valuation catchup according to Sahay’s analysis.
Avalon Technologies: The consistent outperformer
Avalon Technologies continues its track record of exceeding conservative guidance, having outperformed for three consecutive quarters. The company’s management maintains a deliberately conservative approach to guidance, consistently delivering results that surpass expectations.
Valuations: Premium but backed by growth
The EMS sector trades at a significant premium to broader market valuations, reflecting investor confidence in the structural growth story. However, Sahay emphasizes that companies demonstrating superior order book growth and margin improvement trajectory are likely to continue outperforming from current levels, justifying their premium valuations.
“Those who have outperformance in order book and the guidance related to improvement in the margin I believe they are going to outperform from here as well,” Sahay noted, identifying the key differentiators for investment selection within the sector.
Dixon Technologies: The comeback narrative While PL Capital doesn’t officially cover Dixon Technologies, Sahay provided perspective on the company’s recent perf
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