BQ Prime's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Systematix Research Report
Kaynes Technology India Ltd. Q2 (revenue/profit after tax up 32%/54% YoY) missed consensus estimates by 10-15%. Weak margin was due to supply of prototype products to newly added customers.
Despite weak H1, management sounded confident to achieve Rs 17-18 billion revenue (H1 Rs 6.6 billion) and 15%+ Ebitda margin (H1 13.5%) in FY24.
Strong order book position (Rs 34.6 billion, 3.1 times FY23 revenue), addition of large global customers and foray in semiconductors provide vast potential of Kaynes for a decade.
We retain our FY25 earnings estimates and expect 34%/33%/40% compound annual growth rate in revenue/Ebitda/profit after tax over FY23-25E (FY20-23: 45%/60%/116%), driven by all the verticals, with stable Ebitda margin (~15%) and healthy 26% return on invested capital.
Operating cash flow/Ebitda is aimed at 50%. While we remain constructive on robust prospects of Kaynes, after 140% returns in last six months and at 72 times FY25E price/earning on current market price, we downgrade our rating to 'Hold' with a revised target price of Rs 2,573 (earlier Rs 2,251), based on 80 times FY25E P/E.
High multiple is due to Its planned foray into emerging businesses (semiconductor assembly and testing, printed circuit board manufacturing) which provides vast growth opportunities in coming years.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
