The shares of the Semiconductor company, specializing in integrated electronics manufacturing and end-to-end IoT solutions, covering the entire spectrum of Electronics System Design and Manufacturing (ESDM) services, are in focus after the leading Brokerage firm Motilal Oswal & Prabhudas Lilladher initiated a Buy Target with an upside potential of upto 40 percent.
With a market capitalization of Rs. 39,555 Crores the shares of Kaynes Technology India Ltd jumped upto 1.5 percent, reaching a high of Rs. 5939 compared to its previous closing price of Rs. 5,883.65.
What Happened
The leading Brokerage firm, Motilal Oswal, has earlier initiated a Buy Target of Rs. 8,200 on it with an upto 40 percent Upside Potential from yesterday’s close price. Followingly Motilal Oswal mutual fund sold 8.17 lakh equity shares ~worth Rs. 490 Crores, which led to outrage by the public as it initiated a ‘Buy’ target on it, followed by stock sell by the firm itself, leading to a fall in stock price.
While hatred was spreading across the social media about the same saying manipulation or so, the management of Motilal Oswal clarified that that its sell-side(Institutional equities research) and buy-side (AMC investment & other) entities operate independently, and adheres to its own investment philosophies, fund mandates, and risk frameworks to make portfolio decisions, so both are not related as one gives outlook while other handles the fund adhering to investment objectives and based criteria.
The reasons for the “Buy” target by Motilal Oswal
Strong Growth: KAYNES has posted an impressive 58% YoY revenue growth and 80% YoY EBITDA growth in Q2 FY26, with a projected 52% revenue CAGR and 60% EBITDA CAGR over FY25-28.
Margin Expansion: The company has expanded its gross/EBITDA margins by 480bps/200bps YoY, indicating improved profitability driven by higher-margin projects and operational efficiency.
Revenue Guidance: KAYNES maintains its FY26 revenue guidance of Rs. 45 billion, indicating a 64% YoY growth in the second half, demonstrating confidence in continued strong performance.
Working Capital Management: Though working capital is elevated due to higher inventory and receivables, KAYNES is addressing this through initiatives like vendor inventory management and discounting.
Valuation: The target price of Rs. 8,200 is based on a 50x P/E multiple of Sep’27E EPS, reflecting confidence in the company’s strong earnings growth potential and robust market positioning.
Prabhudas Lilladher also recommended an accumulate rating on Kaynes Technology India with a target price of Rs 7565, with an upside potential of 29% from the previous day’s close.
The reasons for the “Buy” target by Prabhudas Lilladher
Segment Growth: KAYNES’ automotive and industrial segments grew by 28.7% and 75.4% YoY in Q2FY26, contributing 22% and 59% to total revenue, respectively. This highlights strong demand in key areas.
Margin Expansion: The company’s EBITDA margin expanded by ~200bps to 16.3%, driven by operating leverage and an increased contribution from the ODM segment, reflecting enhanced profitability.
Guidance & Order Book: KAYNES has maintained its FY26 revenue guidance of Rs. 45 billion with a margin target of ~17%, and it holds a strong order book of Rs. 80 billion as of Q2FY26, ensuring future revenue visibility.
Milestone in Semiconductor: KAYNES reached a significant milestone by delivering India’s first commercially manufactured multi-chip module (IPM5) from its Sanand OSAT facility, in partnership with Alpha & Omega Semiconductor and Mitsui & Company. This, along with its PCB manufacturing set to start in FY27, will drive future growth.
Earnings Revision & Rating: Despite cutting FY27/28E earnings estimates by 0.3%/0.7% due to higher finance costs, the stock’s significant correction has led to an upgrade to ‘Accumulate’ from ‘HOLD’.
Valuation: The target price of Rs. 7,565 is based on a DCF model and implies a P/E of 62x on Sep’27E earnings, indicating strong future earnings growth despite the slight earnings revision.
Outlook: The FY25-28E revenue/EBITDA/PAT CAGR is projected at 46.0%/48.9%/45.0%, with EBITDA margin expansion of ~90bps, signaling continued growth in the coming years.
Financials & Others
The company’s revenue rose by 58 percent from Rs. 572 crores to Rs. 906 crores in Q2FY25-26. Meanwhile, Net profit rose from Rs. 60 crores to Rs. 121 crores in the same period.
The company has a decent ROCE of 14.3% and an ROE of 10.7%. It has achieved strong profit growth with a 95.2% CAGR over the last 5 years and maintains a low debt-to-equity ratio of 0.19.
Kaynes Technology India Limited is a leading integrated electronics manufacturer that provides end-to-end and IoT solutions for diverse industries, including automotive, industrial, aerospace, defence, and medical. Founded in 1988 and headquartered in Mysore, Karnataka.
The company offers services from conceptual design and process engineering to integrated manufacturing and life-cycle support. Kaynes is known for its flexible manufacturing capabilities, extensive certifications, and in-house developed IoT intellectual property.
The company’s order book continues to expand impressively, rising from Rs 5,422 crore in Q2FY25 to Rs 8,099 crore in Q2FY26, marking nearly 49% growth year-on-year. This steady increase through consecutive quarters underscores strong demand momentum, healthy execution capabilities, and a robust project pipeline, positioning the firm well for sustained revenue growth ahead.
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.
The company is a leading integrated and IoT-enabled solutions provider catering to diverse sectors like automotive, aerospace, railways, and medical. With 500+ customers across 30+ countries, it focuses on advanced manufacturing, OSAT, and HDI PCB expansion, and innovation in smart devices, IoT, and AR/VR, positioning itself for strong technological and global growth.
Written by Sridhar J
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