Home Market News Three EMS stocks Motilal Oswal is most bullish on post recent cabinet decisions
As result of the 9% upmove seen on Thursday, shares of Cyient DLM are already at 52-week high levels and have surpassed the brokerage firm’s price target. Brokerage firm Motilal Oswal has highlighted Dixon Technologies Ltd., Cyient DLM Ltd., and Syrma SGS Ltd. as its top picks within the EMS space, after a slew of measures were announced by the government on Wednesday. Motilal Oswal has a price target of ₹16,100 on Dixon Tech, ₹560 on Cyient DLM, and ₹1,630 on Syrma SGS, which implies an upside potential of 17%, 4%, and 16% respectively from Wednesday’s closing levels. As result of the 9% upmove seen on Thursday, shares of Cyient DLM are already at 52-week high levels and have surpassed the brokerage firm’s price target.
The cabinet on Wednesday approved the Mobile Phone Manufacturing scheme, which offers higher incentives for domestic sourcing or backward integration, along with threshold targets for sales and investments. This will have a budgetary outlay of ₹62,500 crore. “Mobile Phone scheme incentives will particularly enhance customer stickiness and will improve margins too, going forward, particularly for players like Dixon,” Motilal Oswal’s note said.
The brokerage went on to add that the positioning of Dixon Tech is stronger than a lot of other players, as it benefits from domestic sourcing or backward integration, which other mobile assemblers do not have. Therefore, the brokerage has continued to maintain a positive bias for the entire EMS sector as it believes that the MPMS, along with the Semicon 2.0 scheme will enhance supply chain resilience, boost technological innovation and position India as a global hub for electronics manufacturing. Motilal Oswal expects both Dixon and Amber Enterprises to participate in the MPMS. Shares of Dixon Tech are trading at a seven-month high, while those of Syrma SGS are trading 1.2% higher at ₹1,421.7.
Shares of Syrma SGS are up nearly 100% so far for the year.
