India’s mobile phone manufacturing {industry} is coming into a special part. The nation has already emerged because the world’s second-largest cell phone producer. Mobile phone production has risen 33x, from round ₹18,900 crore in FY15 to round ₹6.3 lakh crore in FY26. Cell phone exports have additionally elevated from ₹1,566 crore to ₹2.6 lakh crore throughout the identical interval.
But, the following leg of development will rely not simply on producing extra telephones, however on how a lot of the worth chain India can seize. That is the place the federal government’s new Mobile Phone Manufacturing Scheme, or PLI 2.0, is available in. With an outlay of ₹62,500 crore from FY27 to FY31, the scheme shifts the main focus in direction of incremental gross sales, exports and better home worth addition.
The scheme has two goal segments: TS1 (cell phone manufacturing) and TS2 (Indian cell phone manufacturers). Underneath TS1, the Scheme offers a differentiated incentive starting from 2.25% to five%. TS2 (which can present a 1-year gestation interval), in the meantime, offers a 5% incentive to eligible Indian manufacturers, together with an extra 3% incentive for Indian design and analysis and growth.
The motivation doesn’t cease at larger manufacturing. Each segments can obtain an extra incentive of as much as 1.5% for home sourcing of key elements. This makes localization an essential a part of the scheme, alongside the push for larger manufacturing and exports. On the identical time, the federal government has stored the scheme targeted on firms with scale.
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The FY26 Qualification Hurdle: How Scale Dictates PLI Success
Massive producers and EMS gamers want a minimal FY26 turnover of ₹10,000 crore to qualify below TS1. Current manufacturers should then obtain a minimum of ₹5,000 crore of incremental gross sales yearly over their FY26 gross sales base.
New manufacturers, in the meantime, turn out to be eligible after reaching ₹10,000 crore in annual gross sales, following which they have to meet the incremental gross sales targets. If the turnover is low, an electronics manufacturing company or a cell phone producer shall be eligible for TS2 if it has a minimal turnover of ₹1,000 crore in FY26.
That is topic to the scheme’s circumstances, together with assembly all standards for an Indian model. This creates a chance for Indian firms nonetheless constructing cellular manufacturing capabilities to take part because the home electronics ecosystem expands.
Towards this backdrop, we take a look at one main beneficiary of cellular manufacturing scale-up and one other firm that’s constructing a brand new alternative within the phase.
#1 Dixon Applied sciences
The Cell & Different EMS Division is the most important and key contributor to Dixon Technologies’ enterprise portfolio. Income for the Cell & Different EMS Division reached ₹14,179 crores in Q1 FY27, up from ₹11,663 crore in Q1FY26. These gross sales put Dixon in a powerful place to profit from the scheme.
Working revenue, nonetheless, fell year-on-year to ₹373 crore in Q1FY27, in comparison with ₹395 crore in Q1FY26 as margins fell 76 bps to 2.6%. Margin compression was pushed primarily by two components. The closure of the Cell PLI 1.0 scheme incentives in March 2026 and rising world reminiscence and part costs.
Rising costs have slowed the home smartphone market, which shrank by 10% to 12% within the quarter. Regardless of this, Dixon maintained its quantity ranges and gained market share from rivals. The corporate manufactured 75 lakh smartphone items in Q1FY27. Dixon exported 6-7 lakh items throughout Q1FY27, with export income at ₹1,100 crores.
Why the Upcoming Vivo Consolidation is Vital for FY27 Volumes
Dixon expects a powerful quantity rebound in Q2FY27, forecasting 20% to 25% smartphone quantity development QoQ as shopper demand recovers. The Q2FY27 order e-book is strong, standing at 90 to 92 lakh items. Dixon is assured it would shut H1FY27 at round 1.6 crore items and the total yr at 3.2 crore items. The steerage excludes the Vivo volumes.
Successfully, the quantity could be flat in comparison with final yr regardless of industry-wide degrowth. In July 2026, Dixon obtained approval for its joint venture with Vivo. Income is anticipated to be consolidated in Dixon’s financials from Q3FY27. Dixon’s new manufacturing facility in Noida is scheduled to be commercialized in Q3FY27.
To additional strengthen localization and assist captive smartphone meeting, the corporate can also be pursuing backward integration. Dixon is increasing its annual digicam module capability from 7.0 crore items to 18-19 crore items over the following 15 to 18 months. Mass manufacturing of shows (cellular, IT {hardware}, and automotive) is scheduled to begin in early Q4FY27.
How PLI 2.0 Margins Will Reward Dixon’s Backward Integration
Dixon expects the Cell PLI 2.0 scheme to be a significant development catalyst. Anticipated volume-based incentive charges will vary between 2.5% and 5%. The higher band of 5% is designed to aggressively incentivize model house owners to shift world export bases to India. Backward integration into cameras and shows will make Dixon eligible for incremental incentives.
The Hidden Worth of Capturing World Function Cellphone Exports
Dixon’s administration is working carefully with its two foremost anchor clients to focus on the export market. Dixon estimates that PLI 2.0 may assist add 1.5-2.0 crore items to export volumes. This might enhance income by ₹18,000 crore to ₹20,000 crore over the following few years.
Furthermore, Dixon stays India’s largest function telephone producer, accounting for almost 66.7% of all function telephones produced domestically. One in every of Dixon’s anchor clients is shifting its world function telephone export base to India.
#2 Amber Enterprises
Amber Enterprises has expanded into India’s cell phone manufacturing sector. On June 18, 2026, the Amber Group collaborated with Oppo Mobiles. This partnership represents Amber’s foray into the highest-volume shopper electronics class. The collaboration covers three main world smartphone manufacturers (OPPO, OnePlus, and Realme) below the BBK Group umbrella.
At this juncture, Amber has no manufacturing preparations with different main manufacturers equivalent to Vivo. The corporate intends to take small steps to stabilize operations and execute the focused scale efficiently. Thereafter, it would discover partnerships with different smartphone manufacturers.
The collaboration is structurally designed to be asset-light, capital-efficient, and low in working capital depth. The capital outlay to begin meeting and SMT (Floor Mount Know-how) operations is estimated to be under ₹50 crore. The manufacturing shall be carried out at an current facility below a sublease association with Oppo India.
Why the FY28 Scale-Up is Essential for Amber’s Cell Ambitions
Amber and Oppo have established a calibrated phase-wise ramp-up timeline. Trial manufacturing is scheduled to start in Q4FY27, with business manufacturing set to begin in Q1FY28. In FY28, Amber expects to fabricate round 80 lakh items. This quantity represents roughly 20% to 30% of Oppo India’s whole quantity.
Thereafter, volumes are anticipated to just about double in FY29 to a projected vary of 1.3-1.6 crore items as operations stabilize and scale. Amber goals to progressively seize higher-margin part enterprise. In Section-1, Amber will begin with closing meeting and SMT (floor mount know-how) operations.
In phase-2, the corporate will start integrating Excessive-Density Interconnect Printed Circuit Boards into the meeting. By then, the HDI plant (developed below the Ascent-Ok JV with Korea Circuit) shall be operational. From yr 3 and onwards, Amber plans to localize manufacturing of different elements into its ecosystem.
How PCB Integration Will Drive Excessive-Margin Worth Addition
Amber’s objective is to extend native worth addition to 35% to 40% over the following 5 to six years, up from 10-12% within the cellular meeting {industry}. Administration estimates preliminary margin to stay at 1.5-2%. Nonetheless, margins are anticipated to rise as localized part integration (equivalent to PCBs, which carry larger standalone margins of 15% to 16%) will increase over time.
This collaboration would diversify the corporate’s income combine and offset the seasonal nature of its room air conditioner enterprise. Amber qualifies for the ₹10,000 crore FY26 turnover criterion below TS1, with FY26 income of ₹12,186 crore. The corporate may additionally profit because it ramps up smartphone and part manufacturing.
Evaluating Capital Effectivity: Premium Valuations vs Trade Medians
Dixon boasts robust Return on Capital Employed (ROCE) and Return on Fairness (ROE) because of its sooner development than Amber. On valuation, Amber trades at a major premium to each its 3-year historic median P/E a number of and to the {industry} median. Dixon, in the meantime, trades at a reduction to its historic median and at a premium to the {industry} median.
| Peer Comparability (X) | |||||
| Value-to-Earnings A number of | Return Ratios | ||||
| Firm | Firm | 5Y Median | Trade | ROCE (%) | ROE (%) |
| Amber | 131.0 | 91.7 | 38.8 | 10.3 | 6.0 |
| Dixon | 47.7 | 116.1 | 42.3 | 42.0 | 37.4 |
| Supply: Screener.in (As of August 28, 2026) | |||||
For Dixon, PLI 2.0 may very well be greater than an incentive assist. The corporate expects the scheme so as to add 1.5-2 crore items to its export volumes. This probably interprets into ₹18,000–20,000 crore of further income over the following few years. Its backward integration into digicam modules and shows may additional enhance the inducement seize as localization will increase.
Amber, in the meantime, is ranging from a smaller base, however its cellular enterprise provides a brand new development avenue. With volumes focused to rise from round 80 lakh items in FY28 to 1.3-1.6 crore items in FY29, the corporate goals to steadily transfer into higher-value elements. Administration can also be concentrating on 35-40% native worth addition over the following 5 to 6 years.
In the meantime, it’s price maintaining these on your watchlist.
Disclaimer:
Observe: All through this text, we have now relied on knowledge from http://www.Screener.in and the corporate’s investor presentation. We used another, extensively accepted supply of data solely when the info had been unavailable.
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In regards to the Creator: Madhvendra has been deeply immersed within the fairness markets for over seven years, combining his ardour for investing together with his experience in monetary writing. With a knack for simplifying advanced ideas, he enjoys sharing his sincere views on startups, listed Indian firms, and macroeconomic traits.
A devoted reader and storyteller, Madhvendra thrives on uncovering insights that encourage his viewers to deepen their understanding of the monetary world.
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