Kaynes has maintained its guidance to reach Rs 45 billion, however revised its margin guidance from 15.6% to ~17% by FY26. In Q1 FY26 company is having an order book of Rs 74 billion mainly driven from aerospace, industrial and automotive.
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PL Capital Report
We revised upward our FY26/FY27 EPS estimates by 6.1%/5.1%, mainly with expansion in Ebitda margin and lower interest expenses following debt repayment from QIP proceeds, although equity dilution has partly offset the impact on earnings.
We are maintaining our ‘Hold' rating due to the significant uptick in the stock price. Our revised DCF-based target price is Rs 6,367 (up from Rs 6,068), implying PE of 60x FY27E earnings.
Kaynes has maintained its guidance to reach Rs 45 billion, however revised its margin guidance from 15.6% to ~17% by FY26. In Q1 FY26 company is having an order book of Rs 74 billion mainly driven from aerospace, industrial and automotive.
The OSAT facility development is on track, with estimated revenue starting in Q4 FY26, while PCB manufacturing is expected to begin as planned, contributing to revenue from FY27 onwards.
Company acquired August Electronics to strengthen its North American footprint and to get access to high-value global customers in sectors like energy, petroleum, medical, telecom, and IT. Kaynes reported 33.6% YoY revenue growth in Q1 FY26, driven by a 43.3% YoY increase in the industry segment (which contributed 59% rev.).
The Ebitda margin stood at 16.8%, (Expanded by ~250 bps). We estimate FY25-27E revenue/Ebitda/PAT CAGR of 52.2%/56.7%/54.9%, with Ebitda margin expansion of ~90 bps. Maintain to ‘Hold'.
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