Home / Business and Economy / Syrma, Avalon, Kaynes: AI Datacenters Split
Syrma, Avalon, Kaynes: AI Datacenters Split
14 Aug
Summary
- Emkay Research favors Syrma SGS with a 'Buy' rating.
- Kaynes Technology faces a 'Reduce' rating despite fastest revenue growth.
- Global datacentre capex to reach $750-850 billion annually by 2026-2029.
Emkay Research forecasts significant growth for Indian EMS companies leveraging the AI datacentre buildout, with global capital expenditure projected between $750-850 billion annually from 2026 to 2029. The brokerage distinguishes its ratings for Syrma SGS, Avalon Technologies, and Kaynes Technology based on unique business models and expansion strategies.
Syrma SGS earns a 'Buy' rating as Emkay's top pick, citing diversified organic and inorganic growth, margin expansion, and a strong execution record. The company's direct involvement in AI server manufacturing, including printed circuit board assembly for Giga Computing, is a key driver. Emkay projects Syrma SGS's revenue to grow at a 39.6% CAGR and profit after tax at 43.0% between FY26 and FY29.
Avalon Technologies also receives a 'Buy' rating, supported by its one-stop shop approach for mission-critical box-build EMS and a stable, long-standing customer base. Opportunities in power transmission, railway signalling, and semiconductor manufacturing equipment are highlighted. Emkay anticipates Avalon's revenue to grow at 44.3% CAGR and profit after tax at 56.8% between FY26 and FY29.
Kaynes Technology, projected to achieve the fastest revenue growth (47.1% CAGR) between FY26 and FY29, is rated 'Reduce' by Emkay. This cautious stance stems from execution risks associated with its expansion into capital-intensive areas like outsourced semiconductor assembly and test, and high-density interconnect printed circuit board manufacturing. Emkay foresees a near-term dip in Kaynes' EBITDA margin.
