NEW DELHI: December-quarter (Q3FY26) earnings from Dixon Applied sciences and Syrma SGS level to rising variations inside India’s electronics manufacturing providers (EMS) sector: corporations nonetheless depending on mobile-device manufacturing are seeing stress, whereas these with larger publicity to industrial and export-led segments are proving extra resilient.
The performances of the 2 firms spotlight the rising significance of diversification for EMS corporations as value pressures and a world slowdown in cell gadgets weigh on the sector.
On Thursday, Dixon Applied sciences reported ₹10,672 crore in working income for Q3FY26, down 28% sequentially. Web revenue fell 57% sequentially to ₹321 crore. The corporate attributed a lot of the impression to a slowdown in manufacturing of cellphones, smartwatches, audio merchandise, laptops and telecom {hardware}, the place income dropped 27% sequentially to ₹9,750 crore.
Syrma SGS, alternatively, reported a ten% sequential rise in its December working income to ₹1,264 crore. Web revenue crossed ₹100 crore for the primary, rising 66% sequentially to ₹110 crore, pushed by exports in high-margin segments similar to automotive electronics, medical electronics and defence applied sciences, managing director Jasbir Singh Gujral mentioned in a post-earnings name with analysts on Friday.
Syrma SGS additionally turned operationally money flow-positive within the December quarter, and expects its internet working money movement to extend additional by 31 March 2026, Gujral instructed Mint after the earnings name.
The transfer comes as each Syrma and Dixon make investments actively in constructing new services to fabricate printed circuit boards (PCBs) and digital camera and show modules respectively, which each the businesses count on will probably be prepared for manufacturing via FY27.
Buyers responded positively to Syrma SGS within the bourses on Friday. The inventory was up 5.6% on the time of writing. The response to Dixon’s earnings, nevertheless, was muted, with its shares up 0.35% from earlier shut. The 30-share BSE Sensex was down 0.48%.
Dixon Applied sciences additionally missed road estimates, whereas Syrma outperformed. A consensus of 20 analysts polled by Bloomberg had anticipated Dixon to report ₹11,590 crore in consolidated income, whereas 16 analysts anticipated Syrma to report ₹1,185 crore in income for the December quarter.
“The electronics market faces near-term headwinds from commodity inflation and reminiscence worth improve. We proceed to concentrate on constructing scale, bringing operational effectivity, strengthening backward integration, and diversifying the core electronics enterprise to navigate the surroundings,” mentioned Atul Lall, vice-chairman and managing director of Dixon Applied sciences, throughout a post-earnings name with analysts on Thursday.
The slowdown, Lall mentioned, will be attributed to the rise in costs of reminiscence chips all over the world because of most reminiscence producers specializing in synthetic intelligence (AI) chips.
“Business experiences point out this sharp rise, and count on additional will increase via 2026. For smartphones and PCs, reminiscence chips have emerged as one of the vital line gadgets within the invoice of supplies, particularly for lower-priced gadgets,” he added.
In distinction, Syrma SGS wrapped up 2025 on a bullish word.
“We had beforehand guided for an working margin of 8%, and we revised the identical to 9% as exports proceed to assist us increase our margin as strategic segments similar to automotive electronics proceed to do very properly,” Syrma’s Gujral mentioned. “We’re assured of sustaining this tempo as we’re seeing secular progress throughout all verticals, and this diversification helps us enhance our margins and money movement, which we additionally count on to do within the coming yr as properly.”
Analysts mentioned that whereas long-term progress projections for the EMS business stay intact, short-term considerations might damage momentarily.
“Facets similar to reminiscence chip worth improve and US tariff uncertainties, coupled with a slowdown within the world cell phone market, will proceed to have an effect on firms which have a bigger publicity to those areas,” mentioned Harshit Kapadia, vice-president at brokerage agency, Elara Capital.
“For firms which have a wider publicity to numerous industrial electronics, in addition to resilient shopper sectors similar to laptops the place Syrma is exhibiting power, enterprise resilience will probably be stronger. However, till then, there might be near-term considerations as a consequence of sectoral publicity, particularly till the electronics parts push for every of those firms materialize,” he added.