2 weeks ago
Emkay picks Syrma, Avalon in India's $850 billion datacentre boom
There are companies in India that build the electronic parts used in computers, trains, hospitals and giant computer rooms called data centres.
These companies are called EMS companies.
Three of these companies are Syrma SGS, Avalon and Kaynes.
A research company called Emkay studied all three and gave them report cards.
It told investors that Syrma SGS and Avalon are good companies to buy.
It told investors to be careful with Kaynes.
The reason is that computers for artificial intelligence are becoming very popular, and data centres around the world spend a lot of money on them.
Syrma SGS and Avalon are growing steadily in areas like servers, trains and power supply.
Kaynes might grow the fastest, but it is building very expensive new factories, which can be risky.
So Emkay thinks the two steady companies are the safer choice for now.
Emkay Research rated Syrma SGS Technology and Avalon Technologies 'Buy' and Kaynes Technology 'Reduce', with target prices of Rs 2,050, Rs 2,400 and Rs 3,300 respectively.
Global data centre capital expenditure is estimated at $750-850 billion annually between 2026 and 2029, with advanced AI server racks priced at $2-3 million.
Syrma SGS has started printed circuit board assembly for two Giga Computing server platforms, with a roadmap toward system integration and complete box-builds.
Avalon is the EMS partner for Kyosan's electronic interlocking and Kavach rail products, with US customers accounting for 59% of its revenue in Q1 FY27.
Kaynes is projected to post the fastest revenue growth at a 47.1% CAGR, but Emkay flagged execution risks in capital-intensive OSAT and high-density interconnect PCB businesses.
- Who
- Emkay Research issued ratings for three Indian EMS companies: Syrma SGS Technology, Avalon Technologies and Kaynes Technology India.
- What
- The brokerage rated Syrma SGS and Avalon 'Buy' and Kaynes 'Reduce', with target prices of Rs 2,050, Rs 2,400 and Rs 3,300, reflecting different growth, margin and execution outlooks.
- Where
- India - the report assesses Indian electronics manufacturing companies and opportunities from India's data centre, railway, printed circuit board and power transmission sectors.
- When
- The Emkay Research report was dated August 11, 2026, with projections covering FY26 to FY29.
- Why
- The ratings are driven by global AI data centre capital expenditure estimated at $750-850 billion annually between 2026 and 2029, alongside concerns over Kaynes' execution in capital-intensive new businesses.
Key facts
- Report
- Emkay Research, dated August 11, 2026
- Syrma SGS rating
- Buy; target price Rs 2,050 (35% upside)
- Avalon rating
- Buy; target price Rs 2,400 (24.4% upside)
- Kaynes rating
- Reduce; target price Rs 3,300 (11.6% downside)
- Global datacentre capex
- $750-850 billion per year (2026-2029)
- AI server rack price
- $2-3 million; EMS margins of 3.5-8%
- PCB capex pipeline
- Rs 6,950 crore targeted for commercialisation by FY28
- Avalon US revenue share
- 59% of revenue in Q1 FY27
Quotes
J. Sampath
Whole‑time Director and CFO, Kaynes Technology
“Launching our first India‑manufactured server product is an important step in our localization strategy. Working with Syrma SGS has enabled us to bring global server design and manufacturing excellence together, delivering high‑quality products manufactured in India for the Indian market.”
financialexpress.com
“There’s a railway product which got postponed. And being a new product, we don’t want to aggressively push this through.”
financialexpress.com











