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Economic Times
21 hours ago
- Automotive
- Economic Times
Kaynes & Avalon Poised for Strong CAGR Through FY27 on Scale; Motilal Oswal sees over 20% upside each
India's Electronics Manufacturing Services sector is experiencing rapid expansion, fueled by strong orders and increasing global relevance. Government initiatives and rising domestic demand across sectors like EVs and infrastructure are key drivers. Companies are scaling up operations, supported by export growth and improved margins. Kaynes Technologies and Avalon Technologies are highlighted as promising investments, with significant growth projections. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Kaynes Technologies: Buy| Target Rs 7300| LTP Rs 5770| Upside 26% Avalon Technologies: Buy| Target Rs 1030| LTP Rs 828| Upside 24% Tired of too many ads? Remove Ads (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of .) India's Electronics Manufacturing Services (EMS) sector is witnessing rapid growth, supported by a strong order pipeline, ongoing capacity additions, and improving global industry is expanding across segments, backed by rising work content, better execution visibility, and a gradual shift towards higher-margin categories like aerospace, industrial, automotive, and critical inflows remain firm, aided by new client additions, margin-accretive contracts, and prototype-to-production conversions. The cumulative order book for the EMS space (excluding Amber and Dixon) rose 23% YoY to INR 163 billion in FY25, highlighting the sector's robust growth macro drivers are fuelling domestic electronics demand, including higher investments in surveillance, the evolution of electric vehicles and AI applications, and ongoing infrastructure upgrades. Low penetration of consumer electronics and rising income levels also support long-term the increasing involvement of both global and Indian players is strengthening the local value chain. Government-led initiatives such as the Production-Linked Incentive (PLI) and Electronic Component Manufacturing Scheme (ECMS) are further accelerating investments across segments like semiconductors and display companies are scaling up operations to match growing demand. New plant setups, export-oriented units, and investments in areas like OSAT and HDI PCB manufacturing are progressing initiatives cater to rising needs from regions such as Europe, GCC, and North America, while also enabling broader product offerings. Most players saw margin improvements in FY25, a trend likely to continue, boosting earnings summary, the EMS industry is on a strong growth trajectory, supported by favorable demand dynamics, increasing exports, and deepening domestic a supportive policy environment, expanding capacities, and growing importance in global supply chains, the sector is well placed to maintain its growth momentum in the foreseeable is poised for strong FY26 growth with a revenue target of INR45b, driven by higher-margin new orders, operating leverage, and expansion across key verticals such as automotive, aerospace, industrial, and acquisitions have enhanced its global presence & opened new growth opportunities, with future focus on high-margin ODMs & expansion in South Asia & PCB and OSAT units are expected to commercialize by 4QFY26, targeting INR25b revenue in FY27 and INR50b by FY28, with robust margins (~30%/20%). We estimate revenue/EBITDA/PAT CAGR of 57%/61%/70% over FY25–27, driven by scale and margin long-term revenue trajectory is anticipated to be strong, backed by: 1) the addition of new customers in the US and Indian markets, 2) order inflows from the high-growth/high-margin industries, such as clean energy, mobility, and industrials, 3) strategic collaborations and 4) venturing into advanced technology guided for 18-20% revenue growth in FY26, with gross margins of 33-35%. Strategic collaborations (e.g., with Zepco) and capex plans to expand capacity will support future growth. We expect a CAGR of 28%/40%/58% in revenue/EBITDA/adj. PAT over FY25-FY27.(The author is Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd : Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Time of India
21 hours ago
- Business
- Time of India
Kaynes & Avalon Poised for Strong CAGR Through FY27 on Scale; Motilal Oswal sees over 20% upside each
India's Electronics Manufacturing Services (EMS) sector is witnessing rapid growth, supported by a strong order pipeline, ongoing capacity additions, and improving global relevance. The industry is expanding across segments, backed by rising work content, better execution visibility, and a gradual shift towards higher-margin categories like aerospace, industrial, automotive, and critical infrastructure. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Kampong Krabei: Unsold Furniture Liquidation 2024 (Prices May Surprise You) Unsold Furniture | Search Ads Learn More Undo Order inflows remain firm, aided by new client additions, margin-accretive contracts, and prototype-to-production conversions. The cumulative order book for the EMS space (excluding Amber and Dixon) rose 23% YoY to INR 163 billion in FY25, highlighting the sector's robust growth momentum. Several macro drivers are fuelling domestic electronics demand, including higher investments in surveillance, the evolution of electric vehicles and AI applications, and ongoing infrastructure upgrades. Low penetration of consumer electronics and rising income levels also support long-term growth. Additionally, the increasing involvement of both global and Indian players is strengthening the local value chain. Government-led initiatives such as the Production-Linked Incentive (PLI) and Electronic Component Manufacturing Scheme (ECMS) are further accelerating investments across segments like semiconductors and display modules. Live Events EMS companies are scaling up operations to match growing demand. New plant setups, export-oriented units, and investments in areas like OSAT and HDI PCB manufacturing are progressing well. These initiatives cater to rising needs from regions such as Europe, GCC, and North America, while also enabling broader product offerings. Most players saw margin improvements in FY25, a trend likely to continue, boosting earnings predictability. In summary, the EMS industry is on a strong growth trajectory, supported by favorable demand dynamics, increasing exports, and deepening domestic integration. With a supportive policy environment, expanding capacities, and growing importance in global supply chains, the sector is well placed to maintain its growth momentum in the foreseeable future. Kaynes Technologies: Buy| Target Rs 7300| LTP Rs 5770| Upside 26% It is poised for strong FY26 growth with a revenue target of INR45b, driven by higher-margin new orders, operating leverage, and expansion across key verticals such as automotive, aerospace, industrial, and medical. Recent acquisitions have enhanced its global presence & opened new growth opportunities, with future focus on high-margin ODMs & expansion in South Asia & Europe. HDI PCB and OSAT units are expected to commercialize by 4QFY26, targeting INR25b revenue in FY27 and INR50b by FY28, with robust margins (~30%/20%). We estimate revenue/EBITDA/PAT CAGR of 57%/61%/70% over FY25–27, driven by scale and margin gains. Avalon Technologies: Buy| Target Rs 1030| LTP Rs 828| Upside 24% Company's long-term revenue trajectory is anticipated to be strong, backed by: 1) the addition of new customers in the US and Indian markets, 2) order inflows from the high-growth/high-margin industries, such as clean energy, mobility, and industrials, 3) strategic collaborations and 4) venturing into advanced technology segments. Management guided for 18-20% revenue growth in FY26, with gross margins of 33-35%. Strategic collaborations (e.g., with Zepco) and capex plans to expand capacity will support future growth. We expect a CAGR of 28%/40%/58% in revenue/EBITDA/adj. PAT over FY25-FY27. (The author is Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd ) ( Disclaimer : Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Time of India
2 days ago
- Business
- Time of India
Jobs push needs skilling: Economic policy think-tank NCAER urges investment in training, says 13% job gain possible by 2030
AI image NEW DELHI: India can boost employment in labour-intensive sectors by over 13% by 2030 through targeted investment in formal skilling, according to a paper by the National Council of Applied Economic Research (NCAER). The study argues for a multi-pronged policy push to improve workforce quality and bridge the country's employment gap. The paper, titled 'The Landscape of Employment in India: Pathways to Jobs', highlights the critical role of skilled labour in accelerating job creation, particularly in manufacturing and services. 'On the supply side, we show that increasing the share of skilled workforce by 12 percentage points through investment in formal skilling could lead to more than a 13 per cent increase in employment in labour intensive sectors by 2030,' the paper said, quoted PTI. Labour-intensive industries currently account for a significant share of employment—44.1% of manufacturing jobs and 54.2% of services sector employment, the paper noted. 'Our demand-side simulations indicate that we can significantly bridge the employment gap by increasing the size of the manufacturing and services sectors, particularly through a focus on labour-intensive industries therein,' it added. The paper's author, Farzana Afridi, emphasised the need for a 'multi-pronged approach' to enhance production capacity and stimulate job creation, including higher government expenditure, tax cuts, and domestic demand stimulation. While analysing government initiatives, the paper cited a mismatch in the Production-Linked Incentive (PLI) scheme, pointing out that although it focuses on high-skilled, high-value sectors, the most jobs have been created in food processing and pharmaceuticals. 'This reflects a mismatch between budgetary allocation under PLI and potential for employment creation,' the paper said. To maximise gains, the report recommends adopting global best practices, implementing national quality standards, and revamping education systems to improve human capital. It also suggests embedding digital literacy, ICT skills, and soft skills into vocational training to enhance employability. The study referenced the Future of Jobs Report 2025, which estimates that 63% of India's workforce will need reskilling or upskilling by 2030 to stay competitive. 'Improving training quality, along with increasing the share of formally trained workers, can lead to higher employment gains,' the paper concluded. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
2 days ago
- Business
- Time of India
NCAER pitches for investment in skilling to increase jobs
New Delhi: A paper by economic think tank NCAER has made a case for investment in skilling of workforce to increase employment in the labour intensive sectors by 2030. The paper titled 'The Landscape of Employment in India: Pathways to Jobs' said inter-sectoral linkages can have a multiplicative effect on employment in the aggregate economy, increasing employment by up to 200 per cent relative to existing scenario. "On the supply side, we show that increasing the share of skilled workforce by 12 percentage points through investment in formal skilling could lead to more than a 13 per cent increase in employment in labour intensive sectors by 2030," it said. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like a adad Undo On an average, the paper said labour-intensive manufacturing accounts for 44.1 per cent of total manufacturing employment, while labour-intensive services account for 54.2 per cent of total services employment. "Our demand-side simulations indicate that we can significantly bridge the employment gap by increasing the size of the manufacturing and services sectors, particularly through a focus on labour intensive industries therein," the paper said. Live Events Outlining some of the policy prescriptions, the paper's author Farzana Afridi said there is need for a multi-pronged approach to increase production capacity in labour-intensive manufacturing and services sectors, including stimulating domestic demand through higher government expenditure and lowering of taxes. The paper also laid stress on adoption of international best practices and implementation of national quality benchmarks for training and reskilling or upskilling existing workers. Referring to the Production-Linked Incentive (PLI) scheme, the paper pointed out that it is primarily focused on expanding production of high value products with backward linkages which require high-skilled labour. "But the highest number of jobs under the scheme has been created in the food processing and pharmaceuticals industry. This reflects a mismatch between budgetary allocation under PLI and potential for employment creation," the paper said adding productivity and quality of workforce have to be increased significantly to improve labour quality. It cited the Future of Jobs Report 2025 which highlights that 63 per cent of India's workforce will need reskilling or upskilling by 2030 to remain competitive. Among others, the paper suggested incorporating soft skills, digital literacy and Information and Communication Technology ( ICT ) skills into training programmes to enhance employability, particularly within services sub-sectors. "Improving training quality, along with increasing the share of formally trained workers, can lead to higher employment gains," it added. Since labour-intensive manufacturing and services sectors account for over half of total employment in India, the paper advocated significant policy focus on expanding labour-intensive manufacturing and services, along with a systemic overhaul of the education system to enhance the human capital of the labour force.
Time of India
2 days ago
- Business
- Time of India
How China is playing a twin-track game with India
Amid ongoing diplomatic exchanges between India and China, including an ongoing visit by Defence Minister Rajnath Singh and recent visit of National Security Advisor Ajit Doval for the SCO Summit, China is also taking provocative steps. It has halted or severely delayed critical exports to India, including rare earth magnets, specialty fertilisers and even tunnel boring machines (TBMs) destined for the Mumbai–Ahmedabad high-speed rail corridor. These moves raise urgent questions about China's strategy: why is it choosing to weaponise trade just as both sides are seeking to "normalise" ties? China's twin-track strategy on India unfolds as overt diplomatic engagement while exerting covert trade pressures. China's recent actions reflect how it views its trade relationship with India as a tool of strategic leverage. China's strategic leverage through export denials China's control over key supply chains is well established. As the world's leading producer of rare earth elements, fertiliser inputs and industrial machinery, it occupies a dominant position in many high-value sectors. By deliberately delaying or halting exports of these items to India, Beijing is asserting this dominance in subtle but unmistakably coercive ways. The case of rare earth magnets is particularly revealing. These components are essential in advanced electronics, electric vehicles, wind turbines, etc. By denying their export to Indian firms, China is slowing down India's ambitions in high-tech manufacturing, a key pillar of the 'Make in India' and Production-Linked Incentive (PLI) initiatives. Similarly, specialty fertilisers held up at Chinese ports affect India's agricultural sector at a time when global food security concerns remain high. The blockade of tunnel boring machines, critical for a flagship infrastructure project co-funded by Japan, introduces both economic delays and diplomatic awkwardness. Live Events You Might Also Like: After magnets, China now plants agriculture barrier for India All of these actions share a common thread. They enable China to remind India of its central role in global industrial ecosystems, and the consequences of falling out of its favour. Domestic priorities or geopolitical game? China has offered technical reasons for some of these export delays, particularly around fertilisers. Chinese customs authorities have cited inspections under the guise of entry–exit Inspection & Quarantine (CIQ) protocols, ostensibly to protect domestic agricultural needs and control inflation. Yet these justifications do not fully explain export curbs. The deliberate and consistent nature of these export denials, especially when targeted at sensitive sectors and projects, points to a more calculated geopolitical strategy. The Chinese state is using bureaucratic tools to exert pressure without officially declaring a trade embargo. People with knowledge of the matter have told ET that China has not been inspecting shipments meant for India, using various procedures to block exports without imposing an express ban. The pattern suggests this is less about domestic need and more about strategic messaging. "China has been restricting suppliers of specialty fertilisers to India for the last four to five years. However, this time it is a complete halt," Rajib Chakraborty, president, Soluble Fertilizer Industry Association (SFIA), has told ET recently. You Might Also Like: Rajnath Singh calls for bridging trust deficit after 2020 border standoff, urges China to take permanent action Another key driver behind China's trade obstructions may be retaliation for India's post-Galwan restrictions on Chinese economic engagement. Since the deadly 2020 border clash in Ladakh, India has taken several steps to limit Chinese influence in its economy. India mandates government approval for investment by countries that have a border with it, specifically aimed at its northern neighbour. Investment from China now requires government approval under the updated FDI norms (Press Note 3). Over 200 Chinese mobile apps, including TikTok, have been banned on national security grounds. Direct flights between India and China have remained restricted. From China's perspective, these restrictions have curbed its access to India's vast consumer market and investment space. The export denials, therefore, serve as a tit-for-tat response, an attempt to signal displeasure at India's protective economic posture. By denying key supplies, China is reminding India of the cost of economic decoupling. What are India's options? China's export denial strategy is a textbook example of economic statecraft. It reflects not just China's confidence in its industrial leverage but also its increasing willingness to use trade as a tool of coercion. China's export blockades may be an attempt to test India's resilience under pressure. By selectively disrupting supplies of items that are not easily substitutable such as precision magnets or specific fertiliser grades, China could be observing how quickly India can pivot to alternatives. India has already begun to diversify. Russia has emerged as the largest supplier of fertilisers to India, overtaking China. For rare earths, India is deepening ties with Australia, the US and Japan. Domestically, Production-Linked Incentive schemes are being ramped up to encourage local manufacturing of critical components. China may be calculating that while India can eventually diversify, the short-term costs and disruptions will serve as a deterrent. If Chinese exports remain unreliable, and alternatives are more expensive or slower to arrive, India might be forced to recalibrate its trade posture vis-a-vis China by sourcing critical imports from more reliable suppliers as well as ramping up domestic capacity. Diplomacy on the surface, pressure beneath Ironically, these coercive trade tactics are unfolding even as both countries are engaged in diplomatic overtures. NSA Ajit Doval's visit to Beijing and Defence Minister Rajnath Singh's current presence in China underscore a shared interest in stabilising ties, particularly along the Line of Actual Control. But the export denials reveal a different layer of strategy. Beijing appears to be testing the sincerity and strength of India's outreach, using trade friction as a way to probe India's limits. Probably, China wants steep concessions from India to normalise ties just as India seeks a permanent solution to border issues. Beneath overt diplomacy, China is exerting covert pressures through trade to extract benefits from India. But India is playing hardball. While acknowledging constructive and forward-looking exchange of views on issues pertaining to bilateral relations, Rajnath Singh said he told Admiral Don Jun, the Defence Minister of China, "It is incumbent on both the sides to maintain this positive momentum and avoid adding new complexities in the bilateral relationship." The recent export-denial pressures by China could be a ploy as India and China try to reach a new understanding leaving behind years of tension in ties due to border clashes. The first group of Indian pilgrims undertaking the sacred Kailash-Manasarovar Yatra, has reached Manasarovar Lake, marking the resumption of the journey after a five-year break and a sign that both the countries are willing to try to mend relations.
