Kaynes Know-how India Ltd.’s June-quarter earnings drew a cautious brokerage verdict as robust income progress was offset by weaker revenue, a pointy enhance in working capital and better internet debt. Kotak maintained its ‘Scale back’ score, JPMorgan retained ‘Impartial’ and Nuvama downgraded the inventory, citing earnings dangers and its latest rally.
Brokerages mentioned the corporate’s core EBITDA margin was higher than anticipated and income progress remained robust, however cash-flow era and smart-metering collections stay key considerations. The delay within the OSAT and PCB amenities to the third quarter of FY27 additionally pushed again expectations for the subsequent part of progress.
Administration expects FY27 to stay difficult as value pressures persist, with the corporate additionally flagging a provide and value setting just like the interval throughout Covid-19.
Kaynes Know-how Q1 Highlights (Consolidated, YoY)
- Income rose 40.5% to Rs. 946 crore from Rs. 673.5 crore. *(Estimate: Rs. 863 crore)*
- EBITDA elevated 29.5% to Rs. 147 crore from Rs. 113.5 crore. *(Estimate: Rs. 130 crore)*
- EBITDA margin stood at 15.5% versus 16.9% a 12 months in the past. *(Estimate: 15.1%)*
- Web revenue declined 24.4% to Rs. 56.4 crore from Rs. 74.6 crore. *(Estimate: Rs. 66 crore)*
The decline in profitability got here regardless of robust income progress. Gross margin fell 680 foundation factors, whereas worker bills elevated 44% to Rs. 85 crore. Different revenue declined to Rs. 14.4 crore from Rs. 27.1 crore a 12 months earlier, whereas the tax outgo additionally elevated.
Working capital emerged as a key concern in the course of the quarter. Web working capital days elevated to 163 from 122 within the earlier quarter, whereas internet debt rose to Rs. 800 crore from Rs. 200 crore. Good-metering receivables additionally elevated to Rs. 1,311 crore from Rs. 1,158 crore.
The corporate expects its OSAT and PCB items to turn out to be operational in Q3 FY27, later than the sooner Q2 FY27 timeline. Administration mentioned value and provide challenges within the element business have intensified.
This is what brokerages are saying after Kaynes Know-how introduced Q1 outcomes:
Kotak
- Maintained ‘Scale back’; Goal Worth Raised To Rs. 3,550 From Rs. 3,280
- Q1 revenue declined 25% versus its estimate regardless of 40% year-on-year income progress.
- Core EBITDA margin at 15.6% was forward of estimates.
- Adverse working money movement of Rs. 260 crore stays a key concern.
- Working capital days elevated to 163 from 122.
- Good-metering collections stay a priority.
JPMorgan
- Maintained ‘Impartial’; Goal Worth Reduce To Rs. 3,600 From Rs. 3,700
- Q1 was a robust beat and marked the primary income and margin beat in no less than 5 quarters.
- Income grew 40% 12 months on 12 months.
- Working capital stays the important thing concern.
- OSAT and PCB ramp-up has been delayed to Q3 FY27.
Nuvama
- Downgraded To ‘Scale back’; Goal Worth Raised To Rs. 3,450 From Rs. 3,150
- Reduce FY27 and FY28 earnings estimates by 12% and a couple of%, respectively.
- Revised estimates to issue within the Q1 earnings miss and outlook.
- Downgraded the inventory following its latest sharp rally.
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