According to Pib, the Industrial Products industry in India is a significant contributor to the nation’s economy, with a 4.9% growth recorded in March 2024. The Index of Industrial Production (IIP) reached 159.2, reflecting robust performance across sectors like manufacturing, which grew by 5.2%. By 2025-26, the manufacturing sector is projected to hit $1 trillion in output.
With a market capitalization of Rs 33,634.14 crore, the shares of Kaynes Technology India Ltd were trading at Rs 5,254.45 per share, increasing around 0.02 percent as compared to the previous closing of Rs 5,253.65 apiece.
Financial performance:-
Examine the company’s financial condition, revenue zoomed by 69 percent from Rs 297 crore in Q1FY24 to Rs 504 crore in Q1FY25, and during the same time frame, net profit magnified drastically by 104 percent from Rs 25 crore to Rs 51 crore.
Brokerage Coverage:-
Motilal Oswal, one of the well-known brokerages in India, gave a ‘Buy’ call on the semiconductor stock with a target price of Rs 6,400 apiece, indicating a potential upside of 21 percent from Wednesday’s price of Rs 5,254.65 per share.
Here is the reason for such a bullish movement of 26%:-
● The Government of India’s Revamped Distribution Sector Scheme (RDSS) aims to replace conventional meters with smart meters, sanctioning 222 million meters as of September 2024. With 104.7 million meters pending award, significant opportunities await AMISPs and SIs, leading to a total market potential of approximately Rs 632.8 billion.
● Kaynes anticipates capturing a substantial market share in the smart meter segment, targeting an opportunity of around 20 million meters, translating from Rs 60 billion to Rs 65 billion over the next three to four years. The company benefits from partnerships with two leading global firms.
● Kaynes has expanded its smart meter manufacturing capabilities with a new 46-acre facility in Hyderabad, targeting an annual production of 4 million meters. The recent acquisition of Iskraemeco India for Rs 492.86 million further strengthens KAYNES’ position in the growing smart meter industry.
● The expected revenue generation of Rs 4 billion to Rs 5 billion in FY25 highlights Kaynes’ strong entry into the smart meter market, with a projected annual growth of Rs 8 billion to Rs 10 billion from FY26 onwards, reflecting robust demand and successful execution of contracts.
● With an asset turnover of 6-8x, primarily nearing 8x, Kaynes demonstrates its efficient operational model in the smart meter segment. The anticipated 90-day working capital cycle underscores the company’s ability to quickly convert inventory into revenue, optimizing cash flow and enhancing profitability.
Kaynes Technology India Limited is a fully integrated electronics company established in India that offers Internet of Things (IoT) solutions. The company provides conceptual design, process engineering, integrated manufacturing, and life cycle support to key players in the automotive, industrial, and aerospace industries, among others.
Written by:- Abhishek Singh
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