About the Semiconductor Industry: India, recognized as a leading manufacturing hub, has significantly increased its domestic electronics production from US$ 29 billion in 2014-15 to US$ 101 billion in 2022-23. The Indian electronics sector now contributes approximately 3.4% to the nation’s Gross Domestic Product (GDP).
The Ministry of Electronics & Information Technology expects India’s electronics manufacturing industry to expand from US$ 75 billion in 2020-21 to US$ 300 billion by 2025-26.
The government has planned to invest nearly $17 billion over the next six years to support four Production Linked Incentive (PLI) Schemes: Semiconductors and Design, Smartphones, IT Hardware, and Components, according to the India Brand Equity Foundation.
As a result of this significant investment in the semiconductor industry, one semiconductor company is gaining attention in the market this year. Consequently, Foreign Institutional Investors have shown increased interest in this stock by raising their stakes.
In June 2024, Foreign Institutional Investors (FIIs) increased their stake in Kaynes Technology India Limited to 14.27%, up from 7.96% in June 2023, representing a 6.31% increase.
As of August 2, 2024, Kaynes Technologies India Limited shares were trading at ₹4,362, down 0.37%, with a market capitalization of ₹29,922 crore.
About the company: Kaynes Technologies India Limited is an end-to-end and Internet of Things (IoT) solutions-enabled integrated electronics manufacturer.It has a strong customer base with major players like Hitachi, Siemens, Tonbo Imaging, and many more.
Kaynes Technologies boasts a robust customer base, featuring industry giants like Hitachi, Siemens, Tonbo Imaging, and more. They specialize in solutions for Box Build, Printed Circuit Board Assemblies (PCBAs), ODM, Product Engineering, IoT Solutions, smart metering technology, smart street lighting, and inverter technology.
Estimations: For FY 2025, Kaynes Technologie’s management forecasts more than 60% revenue growth, an improvement in operational EBITDA margin exceeding 100 basis points, and a 15% increase in EBITDA margin. They also project over 10% growth in PAT.
The management expects to secure a major contract with a multinational corporation in the Medical Equipment sector by the end of this financial year. Morgan Stanley predicts that Kaynes Technologies will achieve $1 billion in revenue by FY28, with the core EMS business accounting for nearly 75% of this figure.
Additionally, Kaynes Technologies India Limited plans to invest Rs. 2,800 Crores in establishing a semiconductor OSAT (Outsourced Semiconductor Assembly and Test) and compound semiconductor facility in Kongara Kalan, near Hyderabad.
Financials: In Q1 FY25, the company’s revenue from operations experienced a remarkable 70% year-over-year increase, rising from Rs. 297 Crores in Q4 FY24 to Rs. 504 Crores. Net profit also saw a substantial growth of 104%, climbing from Rs. 25 Crores to Rs. 51 Crores.
EBITDA grew by 66%, increasing from Rs. 40.3 Crores in Q1 FY24 to Rs. 66.9 Crores in Q1 FY25. However, EBITDA margins saw a slight decrease of 27 basis points, falling from 13.5% to 13.3%.
Kaynes Technology India Ltd’s share price has surged by 50% over the past six months and 145% over the past year.
In Q1 FY25, Kaynes Technologies Limited generated 55% of its revenue from the Industrial & EV sector, 29% from Automotive, 8% from Railways, 5% from IoT/IT, Consumer, and Other sectors, 2% from Aerospace & Strategic Electronics, and 1% from Medical.
Written by Omkar Chitnis
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