Shares of Kaynes Technology India Ltd have experienced a notable decline, descending approximately 25% from their zenith of ₹7,705 in October. This downturn has coincided with a management upheaval and the conclusion of the lock-in period for pre-IPO stakeholders.
Notwithstanding the recent drop, the company’s growth trajectory appears promising, buoyed by a sizable order book and considerable capital expenditures (capex) spanning a variety of electronic products.
Commercial production is anticipated to commence for certain items within the next two quarters. During a recent analysts’ gathering, management articulated confidence in reaching $1 billion in revenue ahead of the initial target for FY28.
Kaynes is embarking on several critical initiatives, including an outsourced semiconductor assembly and test (OSAT) facility in Gujarat and a printed circuit board (PCB) plant in Tamil Nadu.
Both facilities are scheduled to initiate commercial production in Q4FY26 and Q1FY27, respectively. The company has already brought customers on board for these products, with projected revenues of ₹1,000 crore from the OSAT unit and ₹500 crore from the PCB facility in FY27.
The PCB facility aims to gradually escalate towards high-density interconnect PCBs, which are expected to constitute nearly 20% of total output and yield higher margins.
Additionally, Kaynes is channelling investments into CCL (copper-clad laminate, a crucial intermediate product utilised in PCBs) and camera modules.
Total capex across all projects is projected to reach approximately ₹8,500 crore during FY26-29, nearly double the FY25 balance sheet size of ₹4,600 crore.
Of this total, around ₹3,500 crore, or 40%, is expected to be derived from subsidies provided by both central and state governments under initiatives aimed at fostering a domestic electronics manufacturing ecosystem.
“We maintain a positive outlook on Kaynes, driven by robust momentum in India’s EMS sector, particularly in import substitution. Kaynes enjoys industry-leading margins coupled with strong order inflows,” stated Elara Capital in a report dated November 25, projecting a compound annual growth rate (CAGR) of 49% in earnings per share over FY25-28. The company has also forayed into satellite and drone electronics.
The financial performance of Kaynes reflects a favourable business climate. In H1FY26, revenues surged 47% year-on-year to ₹1,600 crore, while EBITDA exhibited a more pronounced increase of 75%, reaching ₹260 crore, bolstered by a deceleration in input costs and improved operating leverage.
Management has reiterated their guidance of achieving ₹4,500 crore in revenue for FY26, indicating a substantial year-on-year growth of 65%, underpinned by an order book of ₹8,000 crore. FY25 witnessed a revenue growth rate of 51%.
Currently, the stock is trading at 57 times FY27 estimated earnings, as reported by Bloomberg. Consistent performance over the upcoming quarters, coupled with the scaling up of production at new facilities, will be pivotal in determining the trajectory of the stock.
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