Synopsis:
This semiconductor and EMS firm shows strong growth, driven by OSAT, PCB, and EMS businesses, with ambitious FY30 revenue targets. Robust margins, strategic acquisitions, global expansion, and efficient operations support long-term profitability, cash flow stability, and leadership in high-value sectors.
India’s semiconductor sector is booming, with the market size rising from $38 billion in 2023 to $45–50 billion in 2025, and is projected to hit $100–110 billion by 2030. Major investments, over Rs 1.60 lakh crore, fuel local chip manufacturing, with ten sanctioned projects across six states, marking India’s push towards self-reliance and innovation.
With a market capitalization of Rs 49,119.64 crore, the shares of Kaynes Technology India Ltd were trading at Rs 7,327.50 per share, decreasing around 3.54 percent as compared to the previous closing price of Rs 7,593.20 apiece.
Brokerage Recommendation
ICICI Direct, one of the well-known brokerages in India, gave a ‘Buy’ rating on this semiconductor stock with a target price of Rs 8,900 apiece, indicating a potential upside of 23 percent from Wednesday’s price of Rs 7,266 per share.
According to the brokerage, Kaynes Technology is rapidly expanding as a margin-focused EMS player, emphasizing low-volume, high-value businesses and robust design capabilities. Investments in PCB manufacturing and OSAT facilities enhance backward integration, cost efficiency, and supply chain resilience, supporting scalable, profitable long-term growth.
Additionally, Kaynes consistently achieves industry-leading gross margins above 30% (41% in Q1FY26) and EBITDA margins over 15% (16.8% in Q1FY26). Focus on high-margin sectors like industrials, railways, aerospace, and defence, along with expanding PCB and OSAT operations, is expected to further boost margins and profitability.
Furthermore, the company’s OSAT and PCB operations are in early stages, poised to drive significant valuation upside. It is set to deliver India’s first semiconductor chip this month, with commercial production for OSAT and PCB scheduled by Q4FY26. Strong growth prospects, advanced capabilities, and a proven execution record position the company for long-term success in the semiconductor sector.
FY30 Guidance
Kaynes Technology aims to achieve $2 billion in revenue by FY30, driven by growth in its OSAT and printed circuit board businesses. The OSAT segment targets Rs 4,500 crore, while the PC Board unit expects Rs 2,500 crore, highlighting ambitious expansion plans.
To support this growth, Kaynes has a total CapEx of Rs 3,400 crore for its OSAT business, with 70% funded via government subsidies and the rest from internal investment. So far, Rs 200–300 crore has been spent, with another Rs 600–700 crore expected in FY26, underlining a phased approach to capacity building and scaling operations.
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Operations & Financial Highlights
The company delivered strong financial growth in Q1FY26, with revenue climbing 34 percent to Rs 673 crore from Rs 504 crore in Q1FY25. Net profit surged 47 percent to Rs 75 crore, reflecting operational efficiency, robust demand, and improved margins, showcasing sustained momentum and healthy business expansion.
Recently, the company acquired August Electronics, marking a strategic entry into North America, adding high-margin customers and new capabilities, with Rs 175 crore FY26 revenue contribution expected. Its inorganic strategy focuses on targeted acquisitions across North America and Europe, strengthening ODM capabilities, design talent, and global market access while positioning India-Canada as a strong alternative to China.
As per the recent concall, the company reaffirmed FY26 revenue guidance of Rs 4,500 crore, with strong contributions from EMS, OSAT, and its Canadian acquisition. EBITDA margins are expected to stay above 16.8%, supported by product mix and leverage. Execution will ramp up, and improved working capital management should drive robust cash flows.
Management remains highly optimistic, expressing confidence in achieving and even surpassing revenue and margin targets. With strong order book visibility and contributions from new verticals like aerospace, railways, and OSAT, growth momentum looks robust. Additionally, focus on cash flow and working capital improvements ensures stability, supported by structured plans for timely normalization.
Kaynes Technology is a pioneering integrated electronics manufacturer that provides comprehensive end-to-end and IoT-enabled solutions across a diverse range of industries. Driven by customer needs, the company is dedicated to solving real-world challenges, from everyday hurdles to groundbreaking innovations, creating impactful solutions that make a difference.
Written by Abhishek Singh
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