Prabhudas Lilladher's research report on Kaynes Technology India
KAYNES has guided a growth of 60% in FY26 with a margin expansion of 50bps YoY, mainly driven from automotive, industrial, aerospace and IoT segment. In Q4FY25 company is having an order book of Rs 66bn mainly driven from aerospace, industrial and automotive. The OSAT facility development is on track, with estimated revenue starting in Q4FY26, while PCB manufacturing is expected to begin as planned, contributing to revenue from FY27 onwards. In the Export side Company is expecting 15% contribution by FY26 (current contribution 9%). Company acquired August Electronics to strengthen its North American footprint and to get access to high-value global customers in sectors like energy, petroleum, medical, telecom, and IT. KAYNES reported 54.5% YoY revenue growth in Q4FY25, driven by a 57.4% YoY increase in the industry segment (which contributed 55% rev.). The EBITDA margin stood at 17.1%, (Expanded by ~210bps). We estimate FY25-27E revenue/EBITDA/PAT CAGR of 54.4%/58.0%/44.3%, with EBITDA margin expansion of ~70bps. Downgrade to ‘Hold’.
Outlook
We revised upward our FY26/FY27 EPS estimates by 5.1%/3.6%, reflecting strong performance in Q4FY25, primarily driven by Industrial and IT segment. We are downgrading our recommendation to "HOLD" from "Accumulate" due to the significant uptick in the stock price. Our revised DCF-based TP is Rs 5,744 (up from Rs 5,528), implying PE of 60x FY27E earnings.
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