- Kaynes Tech lowers full-year revenue guidance to Rs 4,100 crore from Rs 4,400-4,500 crore
- Company admits earlier revenue expectations were overly aggressive
- Revenue shortfall due to postponement of Rs 300 crore railway project
The management of Kaynes Tech has admitted that the company's guidance was built on expectations that may have been too aggressive, acknowledging over-estimation as the Electronics Manufacturing Services (EMS) giant slashes its full-year revenue target.
Speaking to NDTV Profit, Kaynes Tech has lowered its annual revenue guidance to Rs 4,100 crore, which is a significant drop from the earlier guidance of Rs 4,400-4,500 crore that was communicated to the street. The guidance revision, though, would require Kaynes Tech to execute a stellar Q4 and deliver revenue of Rs 1,700 - something the company is confident of achieving.
"I do unambiguously accept that maybe the expectations were built a tad higher than they are," said Jairam Sampath, whole-time director and chief financial officer of Kaynes Technology, admitting that the company's internal benchmarks had outpaced reality.
"But it's required for us to also keep working on higher expectations. It's better to be sharp on that rather than give a conservative number," he added.
Explaining the miss on revenue and the subsequent lowering of guidance, Sampath attributed it to the postponement of a high-value railway project worth Rs 300 crore, which was delayed to ensure safety-critical standards were met by moving directly to a newer version of the product.
"There is a railway product which is about 3 billion rupee worth of this year's worth of business, which has been postponed. So that probably if it's computed, barring that, we are achieving all the numbers and so on," he said.
Despite the admission, the company is confident about logging Rs 1,700 crore revenue in the fourth quarter with an Ebitda margin of around 16%. The EMS giant is also further envisaging a growth of up to 40-45% until FY29.
"Fundamentally, we plan for a mega quarter in Q4, it's about Rs 1700 crore. A month has already completed and we are quite confident that in the remaining two months, we'll be able to do whatever it takes to get the Rs 1700 crore quarter, so that the total is around Rs 4100 crore thereabouts, which is something like between 46 to 50% growth over last year's numbers," he concluded.
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