Top Stock Pick For 2025 - 'Buy' Kaynes Technology For An Upside Of 31% Says Motilal Oswal; Here's Why

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Motilal Oswal Report

Kaynes Technology India Ltd. is the only rapidly growing (over 50% growth guidance), well-diversified (catering to over seven end-user industries) and backward-integrated player (outsourced semiconductor assembly and test/printed circuit board facilities to commence by FY26) within the EMS space, with a strong focus on value addition (~42% box-build share in FY24).

We expect the company to continue its robust earnings momentum on the back of:

1. a strong revenue growth supported by a large order book (~Rs 54 billion; ~3x FY24 sales) and continuing robust order inflows (~Rs 24 billion in H1 FY25) and

2. margin expansion driven by the rising share of high-margin businesses coupled with operating leverage.

We estimate Kaynes to register a revenue/adjusted Ebitda/Adj. PAT CAGR of 60%/67%/74% over FY24-27.

We reiterate our Buy rating on the stock with a target price of Rs 9,100, based on 60x FY27E EPS.

Key risks to our call:

1. an increase in working capital can deteriorate cash flows,

2. supply chain issues can hamper business operations, and

3. a delay in order execution can moderate the growth trajectory.

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