Shares of Dixon Technologies (India) Ltd., Kaynes Technology India Ltd., and Syrma SGS Technology Ltd. gained as much as 4 per cent on Wednesday after global brokerage JPMorgan initiated coverage on the stocks with an 'Overweight' rating, citing strong growth potential in India’s booming electronic manufacturing services (EMS) sector.

Among the three, Syrma SGS Technology received a particularly optimistic outlook. JPMorgan expects Syrma to be the third-fastest growing company in its EMS coverage universe, with a projected 31 per cent compound annual growth rate (CAGR) in revenue over FY25–28. The brokerage also anticipates a 70 basis point improvement in EBITDA margins, reaching 9 per cent by FY28, driven by strong demand in the industrial and automotive segments and easing margin pressure in the consumer electronics segment. A recovery in exports, expected from FY27, could also fuel growth — a factor JPMorgan says is not fully priced in by the market, leaving room for earnings upgrades.

Dixon Technologies also earned an 'Overweight' rating. JPMorgan projects a 38 per cent revenue CAGR over FY25 with stable margins. The company is expected to benefit from a ramp-up in mobile manufacturing, bolstered by a growing order book from its anchor customer and the upcoming Vivo joint venture, which is scheduled to begin operations in Q4 FY26. The brokerage highlighted a total addressable market of 140 million mobile units — 90 million already outsourced and 50 million currently in-house but likely to shift — compared to Dixon’s internal target of 60 to 65 million units by FY27.

Kaynes Technology, meanwhile, is set to lead the pack in terms of growth, with JPMorgan forecasting a 46 per cent revenue CAGR between FY25 and FY28. The company is targeting USD 1 billion in revenue by FY28, making it the fastest-growing EMS firm in the brokerage’s coverage universe.

JPMorgan described India’s EMS industry as a "sunrise sector", forecasting a 32 per cent revenue CAGR between FY25 and FY30. Key drivers include increasing electronics penetration, policy support from the ‘Make in India’ initiative, and global supply chain diversification through the China+1 strategy.

The brokerage also initiated coverage on Amber Enterprises and Cyient DLM with a 'Neutral' rating, while Avalon Technologies received an 'Underweight' rating. However, it noted that exports could become a long-term growth engine, naming Syrma, Cyient DLM, and Avalon as potential beneficiaries of this trend.

While the EMS sector has already rallied nearly three times in the past three years, JPMorgan cautioned that further upside may depend on earnings upgrades. It identified Syrma SGS Technology and Dixon Technologies as its top revision picks, reflecting strong confidence in their future earnings potential.