Govt to Rejig PLI 2.0: 3 EMS Stocks to Watch Amid Rising GPU and Memory Prices

#2 Dixon Technologies

Dixon Technologies is India's leading electronic manufacturing services (EMS) provider. It specializes in designing, manufacturing, and assembling consumer electronics for global brands.

The company is a key beneficiary of PLI schemes, as it is engaged in electronics manufacturing.

Dixon Technologies Financial Snapshot

On the financial front, Dixon Technologies reported revenues of Rs 106,716 m in Q3 FY26 vs Rs 104,537 m YoY. Net profits of the company were placed at Rs 3,127 m vs Rs 2,127 m YoY.

Moving ahead, the company is expanding rapidly. In the first phase of its joint venture with HKC for display modules, Dixon Technologies is creating a capacity of 24 m per annum for smartphones and 2 m units per annum for notebooks, which would be for 76% of captive consumption.

In the second phase, the company will enhance this capacity to 60 m units per annum for smartphones, which will account for almost 80% of the captive consumption.

#3 Kaynes Technology

Kaynes is aggressively expanding into the semiconductor backend through its subsidiary, Kaynes Semicon. Kaynes is set to launch its OSAT (Outsourced Semiconductor Assembly and Test) plant in Sanand, Gujarat, by September 2026.

As memory prices surge, the government may incentivise domestic packaging of these components. Kaynes stands to benefit if the rejigged PLI focuses on domestic value addition in the semiconductor and memory modules rather than just final assembly.

Financial Highlights of Kaynes Technology India

On the financial front, Kaynes Technology India reported consolidated net sales of Rs 8,040 m for Q3 FY26, which was significantly higher than Rs 6,612 m YoY.

Net profits for Q3 FY26 came in at Rs 766 m from Rs 665 m in the corresponding period of last year.

Moving ahead, Kaynes Semicon Private Limited, a wholly owned subsidiary of Kaynes Technology India, has announced two landmark strategic partnerships with global technology leaders - AOI Electronics Co., Ltd. (Japan) and Mitsui & Co., Ltd. (Japan) - to strengthen its upcoming semiconductor manufacturing operations in India.

These alliances are expected to play a crucial role in advancing India's ambitions to become a global semiconductor hub.

Conclusion

On the positive side, the PLI 2.0 rejig signals continued government support, possibly higher incentives, broader coverage (like electronics, semiconductors, EVs), and faster approvals.

This can improve revenue visibility, margins, and capex cycles for companies in these segments. Markets often price this optimism early, leading to sharp stock rallies even before actual earnings catch up.

However, this is exactly where caution is critical. Many of these stocks tend to rerate ahead of fundamentals, driven by policy expectations rather than actual execution.

Valuations can stretch significantly. High PE multiples, optimistic growth assumptions, and aggressive capacity expansion projections. If the policy changes are delayed, diluted, or fail to translate into earnings, these stocks can correct sharply.

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