Kaynes Tech’s income for the quarter stood at ₹946 crore, a progress of 40% from final yr, and better than the CNBC-TV18 ballot determine of ₹866 crore. The corporate’s core companies grew over 30% every, whereas its different smaller companies grew between 70% to as excessive as 180%.
|
Kaynes Tech Segments |
YoY progress |
% gross sales |
|
Vehicle |
+35% |
26 |
|
Industrial (incl EV) |
+31% |
55 |
|
Aerospace Outerspace & Strategic electronics |
+181% |
2 |
|
Medical |
+181% |
2 |
|
Railway |
+81% |
9 |
|
IoT/IT, Cons and others |
+69% |
6 |
The corporate’s Earnings Earlier than Curiosity, Tax, Depreciation and Amortisation (EBITDA) for the quarter stood at ₹147.5 crore, largely in-line with the CNBC-TV18 ballot estimate of ₹130 crore and better than final yr’s determine of ₹113 crore.
EBITDA margins noticed some strain, narrowing to fifteen.6% from 16.7% within the year-ago interval, however turned out to be higher than the 15% estimate. With value of products rising to ₹620 crore from ₹396 crore through the quarter, the corporate’s gross margins narrowed to 34.4% from 41.1% final yr. The administration attributed the gross margin compression to supply-chain, power, commodity and foreign exchange value escalation.
On the finish of the June quarter, Kaynes Tech’s order e book stood at ₹8,900 crore, a progress of 20% from final yr and 6% sequentially. Order book-to-trailing 12-month gross sales ratio remained steady at 2.3x. Nonetheless, the typical money conversion cycle elevated to 163 days from 122 final yr.
Listed below are three key takeaways from the administration’s earnings name:
The corporate has known as monetary yr 2027 to be a troublesome yr, however expects it to react quicker to conditions in comparison with its friends. It additionally sees profitability normalizing over the following couple of quarters.
Kaynes Tech’s good metering enterprise is prone to flip money optimistic by the tip of the yr and it plans on issuing an in depth de-risking technique in February subsequent yr, with service-to-product mannequin readability rising by the third quarter.
The corporate can be in superior, near-closing talks with one of many largest international Electrical Car producers, the area enterprise is focusing on to launch a prototype satellite tv for pc by mid-next yr, and its two subsidiaries are coming into the titanium-gas bottle provide for ISRO and DRDO.
Motilal Oswal Says “Purchase” for 30% Upside:
Brokerage agency Motilal Oswal has maintained its “purchase” ranking on Kaynes Expertise with a worth goal of ₹5,000, indicating an upside potential of 30% from present ranges.
The brokerage stated that with a strong order e book, Kaynes is prone to maintain its robust income progress momentum going ahead.
“Going ahead, Kaynes’ progress shall be pushed by continued scaling of its core EMS enterprise, with progress throughout all verticals. OSAT and PCB are anticipated to emerge as key progress engines, with commercialization focused from the third and fourth quarter of FY27,” Motilal Oswal stated, including that the corporate’s growth into area and protection electronics ought to additional diversify its progress profile.
Motilal Oswal expects Kaynes Tech’s income to develop at a Compounded Annual Progress Price (CAGR) of 41%, EBITDA CAGR of 44% and Adjusted. PAT CAGR of 52% over monetary yr 2026-2028.
Nonetheless, to issue within the lower-than-expected outcomes on account of greater depreciation and tax, and decrease different revenue, the brokerage has lower Kaynes’ monetary yr 2027 and 2028 Earnings Per Share (EPS) expectations by 11% and 5% respectively.
Here is what different analysts should say about Kaynes Tech:
CLSA has maintained its “maintain” ranking on the inventory with a worth goal of ₹3,650.
The brokerage stated that regardless of an operationally robust quarter, Kaynes’ stability sheet parameters weakened additional, with an increase in working capital days, leading to a decline in reported Return on Capital Employed (RoCE).
It additionally attributed the unfavourable working money stream to elevated stock and receivables, though collections from the good metering enterprise has began to pick-up.
JPMorgan can be “impartial” on Kaynes with a worth goal of ₹3,600. It additionally known as the rise in web working capital days as an enormous unfavourable, together with a rise in stock days on account of provide facet challenges.
It has lower its EPS estimates for the corporate by 7% to 9% primarily on account of a better tax charge.
“Though the income and margin efficiency is encouraging given misses seen in final one yr, NWC stays a priority & would monitor execution there by way of lowering receivables particularly in good meters,” the brokerage stated.
Nomura has additionally maintained its “impartial” ranking on the inventory with a goal of ₹4,094.
It has maintained its income and EBITDA progress estimates for the following three years however lower its EPS estimates by 6% to 9% on account of greater depreciation and tax charges. It known as valuations “truthful.”
Kotak Institutional Equities has a “cut back” ranking on the inventory with a goal of ₹3,550.
Shares of Kaynes tech wish to get better from the lows of the day, at present buying and selling 6% decrease at ₹3,655. It should be famous that the inventory is at present within the Futures & Choices (F&O) ban, which implies no new positions may very well be created within the inventory.
