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MeitY approves 4th tranche of ECMS scheme

ICICIdirect Research 03 Apr 2026 DISCLAIMER

The Ministry of Electronics and Information Technology (MeitY) has approved 29 proposals under the 4th tranche of the ECMS scheme, involving investments of ₹7,104 crore and an estimated production potential of ₹84,515 crore. Among the listed EMS companies, Dixon Technologies has secured approvals for Display module sub-assembly while Syrma SGS Technology has received approval for copper clad laminate (CCL) & flexible PCBs.
Dixon’s wholly owned subsidiary, Dixon Display Technologies, will undertake display module sub-assembly. This comes alongside its recent press note 3 (PN3) approval, with the facility nearing completion. Phase-1 capacity is targeted at ~24 million smartphone display units annually, along with ~2 million units for notebooks and automotive displays which could have revenue potential of ~₹ 3,000 crore.
Meanwhile, Syrma SGS, through Syrma Strategic Electronics has committed an investment of ~₹1,600 crore for building capabilities in PCBs (single layer, multi-layer and flex PCBs) & copper clad manufacturing, positioning itself to benefit from import substitution and rising domestic electronics demand.
Separately, PM Modi has inaugurated Kaynes OSAT facility at Sanand, wherein this facility will focus on chip packaging and testing and produce IPMs (intelligent power modules). Here, Kaynes is investing ~₹ 3,300 crore+ in phases of which ~70% is backed by government subsidies. The company shall have production capacity of 6.3 million chips per day, with initial production aiming at 1.5 million chips daily. Kaynes expects the business could contribute ~₹ 1000 crore revenue in FY27E and full revenue potential of ~₹ 4000 crore likely by FY30 with 20%+ EBITDA margin.     
Besides, Government is soon expected to announce ISM 2.0 of ~₹ 1.2 lakh crore, against ISM 1.0 of ~ ₹76,000 crore. Overall, Government has been continuously showcasing its intent to support the vision of electronics and semiconductor manufacturing ecosystem through initiatives such as ECMS, ISM, PLI etc. which shall drive strong business growth for EMS companies.
We have BUY rating on both SYRMA and Dixon with target price of ₹1,025 and ₹13,000 respectively.

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