January 8, 2025
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Stock Market

Dixon, Kaynes, and other EMS stocks fall by up to 8%; Here’s the reason behind the fall

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Stock Market

Dixon, Kaynes, and other EMS stocks fall by up to 8%; Here’s the reason behind the fall

According to PWC, The Electronics Manufacturing Services (EMS) sector in India is rapidly expanding, projected to grow at a 41% CAGR, reaching approximately Rs 5,980 billion by FY26. With domestic production valued at over $101 billion in FY23, India aims to become a global leader in electronics manufacturing by 2025, targeting $400 billion in output.

Today, Electronics manufacturing service (EMS) providers faced a selloff as the Nasdaq Composite fell nearly 2%, led by Big Tech declines. Persistent inflation fueled concerns over Federal Reserve rate cuts this year, sparking the losses and impacting sentiment across the tech-heavy market.

Indian EMS stocks closely follow the Nasdaq Composite, reflecting their strong ties to the technology sector. These companies manufacture electronics and components for global tech giants, whose performance on the Nasdaq significantly impacts the valuation and market trends of Indian EMS players.

Weak Nasdaq Composite indications eclipsed optimism about the upcoming production-linked incentive (PLI) scheme for electronics components, which would be funded by Rs 25,000 crore in the next Union Budget. This strategy is expected to stimulate the electronics industry.

Moreover, the industry has been pushing for a Rs 40,000 crore allocation, and the Ministry of Electronics and Information Technology may consider increasing the expected Rs 25,000 crore outlay depending on the scheme’s response.

Here are the EMS stocks that have fallen up to 8% after concerns over stubborn inflation:

1. Dixon Technology Ltd

Dixon Technologies (India) Ltd is the largest home-grown design-focused solution engaged in manufacturing goods for the consumer durables, lighting, and mobile/smartphone industries in India.

With a market capitalization of Rs 1.02 lakh crore, the shares were trading at Rs 17,044.80 per share, decreased around 8% in today’s trading session as compared to the previous closing price.

2. Kaynes Technology India Ltd

Kaynes Technology India Limited is a fully integrated electronics company established in India that offers Internet of Things (IoT) solutions. The company provides conceptual design, process engineering, integrated manufacturing, and life cycle support to key players in the automotive, industrial, and aerospace industries, among others.

With a market capitalization of Rs 44,451.32 crore, the shares were trading at Rs 6,944.35 per share, decreased around 5% in today’s trading session as compared to the previous closing price.