EMS Sector Check - A Strong Q1; Management Guidance Remains Robust: Systematix

Systematix Research Report

The seven EMS companies under our coverage reported 77%/ 63%/75% YoY rise in revenue/Ebitda/profit after tax and were 10-15% ahead of our estimates, led by PGEL, Dixon and Amber Enterprises.

Strong demand of cooling products helped; strong guidance remained intact too. Syrma reported 32% YoY dip in PAT despite 93% jump in revenue; management is confident of healthy recovery in margins in FY26.

Elin reported another weak quarter; management hinted at demand revival across product segments. Despite a poor Q1, Avalon expects revival Q3 onwards and has increased its FY25 revenue growth guidance to 16-20% while keeping 30% plus compound annual growth rare intact over the next three years.

Kaynes remains bullish on its growth prospects; new business of OSAT and PCB will meaningfully contribute from FY27 (reason for scrip’s high valuation.

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