Electronic Manufacturing Services – Oct-Dec’25 Earnings Preview – EMS growth intact; margin pressure in CD

Electronics manufacturing services (EMS) companies under our coverage are expected to post moderate YoY revenue growth of 19.0% in Q3FY26, driven by single-digit growth in AMBER’s Consumer Durables (CD) segment, which contributes ~70% to its topline, while KAYNES, SYRMA, and AVAL are likely to maintain strong momentum, with YoY revenue growth of 40.0%, 22.8%, and 27.0%, respectively. We expect margins to remain largely YoY stable at 8.9% for the EMS universe, while AMBER is likely to witness a sharp correction due to higher input costs, adversely impacting profitability. Overall, EMS companies under our coverage are expected to deliver 12.7% YoY profit growth. Looking ahead, we expect pickup in order book across EMS companies, supported by their strategic focus on higher margin sectors and orders, which should further support margin expansion in the coming quarters, Additionally Changes in BEE norms in RAC led to price increases, while the GST cut provided a 1–2% benefit that partially cushioned the impact. RAC inventory is expected to normalize by Q4FY26. We expect our EMS universe to register sales/EBITDA/PAT growth of 19.0%/17.8%/12.7% YoY in Q3FY26, on the back of robust order execution and margin improvement led by cost rationalization and increased contribution from high-margin segments. We continue our positive view on EMS companies that will see healthy growth and continuously expanding opportunity market.