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Electronics sector gets key ECMS (Electronics Components Manufacturing Scheme) approvals, Marks next phase of value chain integration

ICICIdirect Research 21 Nov 2025 DISCLAIMER

Government of India has recently approved total of 24 projects under ECMS scheme under two tranches amounting to ~₹12,704 crore of committed investments. 1st tranche approved on 27th Oct includes 7 projects with committed investments of ~₹5,532 crore and 2nd tranche approved on 17th Nov includes 17 projects with ~₹7,172 crore of committed investments. Among listed space, Kaynes, Syrma, Amber have got major approvals.  
Under this scheme, companies will get financial incentives i.e. i) turnover linked incentive of average 3-7% of incremental sales over 6 years, depending on component, ii) capex incentive i.e. ~25% on capital investment, iii) hybrid incentive of turnover and capex combination.
Such government support measures are aimed to make Indian companies more competitive and develop a robust electronics ecosystem. This shall enhance domestic value addition, integrate Indian companies with global value chains and steadily position India as manufacturing hub even for global markets in long term.
From our coverage, i) Kaynes Technology has got approval for Rs 3280 crore investment under ECMS scheme for Multi-layer & HDI PCB, Camera Module sub assembly, and Copper Clad laminates. ii) Amber Enterprises is investing Rs 991 crore for Multi-layer PCB. Further, approval for ~Rs 3200 crore investment for HDI PCB in partnership with Korea circuit is awaited. iii) Syrma SGS has got approval of Rs 765 crore for multi-layer PCBs in 1st tranche and has further got approval for camera module production in 2nd tranche of ECMS scheme. Financial performance of these investments are likely to fully reflect from FY28 onwards.
All these investments in component ecosystem shall increase value addition, aiding business growth and backward integration, and thus strengthening their business model. Further, these investments are expected to be margin accretive i.e. in mid-high teen range and shall support improvement in return ratios. We have BUY rating on Syrma SGS with target of ₹1025, Kaynes Technology with target of ₹8900 and Amber enterprises with target of ₹9500.

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