Kaynes is likely to maintain its robust revenue growth trajectory in FY25 (up 67% YoY) and is confident of sustaining this high growth going forward, fueled by the contributions from new and upcoming segments, such as smart meters (~Rs 615 billion domestic TAM along with export opportunities), Aerospace, and Kavach (targets ~Rs 20 billion revenue over the next four-five years), et al.
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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:
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
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:
an increase in working capital can deteriorate cash flows,
supply chain issues can hamper business operations, and
a delay in order execution can moderate the growth trajectory.
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