Indian ESDM Sector Expected to Exceed Rs 9 Lakh Crore by FY28
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New Delhi, Dec 10 (NationPress) The Indian electronics system design and manufacturing (ESDM) sector, currently valued at approximately Rs 2.09 lakh crore in FY23, is estimated to grow to Rs 9.09 lakh crore by FY28E, with a remarkable compound annual growth rate (CAGR) of 34 percent, as stated in a report on Tuesday.
The primary factors driving this growth include the increasing outsourcing of manufacturing by original equipment manufacturers (OEMs) to specialized ESDM providers, a surge in demand for electronics, an extensive and growing domestic market, the 'China +1' strategy, and several governmental initiatives like the production-linked incentive (PLI) scheme along with investments in semiconductor development, according to the report released by PL Capital Group - Prabhudas Lilladher.
“The addressable market for the ESDM sector was valued at Rs 4.39 lakh crore in FY23, with OEMs progressively increasing their dependence on ESDM partners,” remarked Praveen Sahay, research analyst.
Moreover, the domestic printed circuit board assembly (PCBA) market is anticipated to achieve a CAGR of 41.6 percent and reach Rs 6.55 lakh crore by FY26E, rising from Rs 2.31 lakh crore in FY23.
“This growth will be propelled by factors such as enhanced value addition, increasing global demand for electronics, and the necessity for high-speed assembly and miniaturization,” added Sahay.
To leverage this opportunity, India is providing incentives for contract manufacturers and enhancing its manufacturing capabilities, which will boost PCBA exports, elevate India's role in the global supply chain, and fortify its position as a leader in electronics manufacturing.
The brokerage has commenced coverage on four domestic ESDM companies - Avalon Technologies, Cyient, Kaynes Technology, and Syrma SGS Technology, all of which have a positive outlook.
These four companies are well-positioned for growth, backed by diverse sector penetration, robust order books, and strategic expansion plans.
“As OEMs assign manufacturing tasks to ESDM partners, they can focus on marketing and post-sales services along with growth initiatives, while ESDM firms harness economies of scale to adapt to technological advancements and negotiate more effectively with suppliers,” it added.
