Budget 2026: Rs 40,000 crore electronics component outlay lifts Dixon Tech, Kaynes, PG Electroplast, and other EMS stocks up to 7%

Synopsis

Semiconductor Stocks: Electronics manufacturing services stocks rallied after the government raised the Electronics Component Manufacturing Scheme outlay to Rs 40,000 crore in Budget 2026. Dixon Technologies, Kaynes Technology, PG Electroplast and peers gained as investors priced in higher domestic demand, stronger incentives and long term semiconductor manufacturing growth.

India’s electronics manufacturing services stocks surged up to 7% in Sunday trading after the government announced an expansion of its Electronics Component Manufacturing Scheme to Rs 40,000 crore, signalling a fresh push to localise production and accelerate semiconductor development.

Shares of Indian EMS firms including Dixon Technologies, Kaynes Technology, PG Electroplast, Syrma SGS and Amber Enterprises rose between 3.25% and 7% following the announcement in Budget 2026, reflecting investor optimism over higher domestic demand and government backed incentives.

Finance Minister Nirmala Sitharaman said the Electronics Component Manufacturing Scheme, launched in 2025, has already attracted investment commitments twice its original target. The government now plans to increase the scheme’s outlay to Rs 40,000 crore to further boost electronics manufacturing in India.

Among the top gainers, Dixon Technologies climbed as much as 5.4% to Rs 11,008.85 on the BSE, Kaynes Technology rose 5.2% to Rs 3,656.15, and PG Electroplast advanced 3.5% to Rs 566.55. Syrma SGS Technology and Amber Enterprises each jumped 6.7% to Rs 812.10 and Rs 6,095.10, respectively.

In a rare move, the BSE and National Stock Exchange held a live trading session on Sunday to coincide with the Union Budget presentation, amplifying market reactions to the policy measures targeting the electronics supply chain.

EMS firms are expected to be direct beneficiaries of the government’s strategy to scale up electronics and semiconductor manufacturing.

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Divam Sharma, co founder and fund manager at Green Portfolio PMS, said the Budget’s continued focus on electronics manufacturing and semiconductors is a structurally positive development. "This is not just a policy announcement but a continuation of a multi year strategy that markets tend to reward. India’s growing electronics export base has already begun translating into improving order books and capacity expansion for several listed EMS players, component manufacturers and capital goods companies," he said.

Sharma said the focus on supply chain resilience was also supportive for margins and competitiveness. “A notable positive from a market perspective is the focus on supply chain resilience, including initiatives such as the rare earth corridor. In a global environment marked by geopolitical uncertainty, securing critical minerals and inputs lowers operational risk and improves cost predictability.”

“Taken together, these measures reinforce India’s positioning as a credible alternative in global value chains. For the stock market, this supports a long term re rating opportunity in manufacturing linked sectors, encourages incremental foreign investment, and strengthens the broader investment narrative around India’s structural growth story,” he said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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