---
title: "Kaynes Technology — Deep Dive Analysis"
ticker: "KAYNES:NSE"
date: "2026-06-18"
tags: ["kaynes","deep-dive","electronics"]
summary: "Kaynes Technology deep dive — OSAT and PCB catalysts, PEG 1.10, P/E 62.1. Revenue CAGR 31.4%. Concerns: ₹600 Cr CFO risk, promoter/FIIs exiting."
model: "deepseek-chat"
---

# Kaynes Technology India Ltd — Deep Dive Analysis

*Analysis by deepseek-chat*

**Date:** June 18, 2026  
**Symbol:** KAYNES (NSE) | 543664 (BSE)  
**Sector:** Electronic Technology / Electronic Production Equipment  
**Data Source:** Screener.in (Consolidated, Logged-in), TradingView, NSE, BSE, Company Presentations  

---

## Quick Snapshot

| Metric | Value |
|---|---|
| **Current Price** | ₹3,387 |
| **Market Cap** | ₹22,706 Cr |
| **Stock P/E** | 62.1 |
| **Industry PE** | 31.7 |
| **PEG Ratio** | 1.10 |
| **ROCE** | 13.2% |
| **ROE** | 9.64% |
| **Book Value** | ₹708 |
| **Debt to Equity** | 0.19 |
| **Dividend Yield** | 0.00% |
| **Sales (TTM)** | ₹3,626 Cr |
| **PAT Prev Ann** | ₹286 Cr |
| **Profit Var 3Yrs** | 56.7% |
| **Graham Number** | ₹930 |
| **Earnings Yield** | 2.85% |
| **Piotroski Score** | 4.00 |
| **Debtor Days** | 154 |
| **52W High / Low** | ₹7,705 / ₹2,995 |

*Data as of Screener.in consolidated view (logged in)*

---

## 1. Business Overview

Kaynes Technology is a leading end-to-end IoT-enabled integrated electronics manufacturing services (IEMS) company, incorporated in 2008 (roots from 1988). It provides:

- Conceptual design and process engineering
- Integrated manufacturing (EMS)
- Life-cycle support across the entire electronics value chain

**Key Verticals:** Automotive, Industrial (incl EV), Aerospace & Defence, Outer Space, Medical, Railways, IoT/IT

**New Growth Engines:**
1. **OSAT (Kaynes Semicon)** — ₹3,300 Cr facility at Sanand, Gujarat. Pilot line operational, Unit 2 ready by July 2026
2. **HDI PCB (Kaynes Circuits)** — Chennai, PCB Unit 1 operational by July 2026
3. **Smart Metering** — Product + installation + O&M model
4. **AI-Powered Railway Safety (Kavach)**

**Recent Milestone:** India's first commercial Multi-chip module launched from Sanand OSAT facility, shipping Intelligent Power Modules (IPMs) to Alpha & Omega Semiconductor (AOS)

---

## 2. Financial Performance (Consolidated)

### P&L at a Glance (₹ Cr)

| Year | Sales | OPM% | Net Profit | PAT% | EPS (₹) |
|---|---|---|---|---|---|
| **FY22** | 706 | 13% | 42 | 5.9% | 9.03 |
| **FY23** | 1,126 | 15% | 95 | 8.4% | 16.37 |
| **FY24** | 1,805 | 14% | 183 | 10.1% | 28.68 |
| **FY25** | 2,722 | 15% | 293 | 10.8% | 45.84 |
| **FY26** | 3,626 | 16% | 364 | 10.0% | 54.28 |

**5Y Sales CAGR:** 108%  
**5Y Profit CAGR:** 108%  
**3Y Profit CAGR:** 56.7% (as per Screener)

### Quarterly Trend (Latest 5 Quarters)

| Quarter | Sales (₹ Cr) | OPM% | PAT (₹ Cr) | EPS (₹) |
|---|---|---|---|---|
| Q4 FY25 | 984 | 17% | 116 | 18.15 |
| Q1 FY26 | 673 | 17% | 75 | 11.14 |
| Q2 FY26 | 906 | 16% | 121 | 18.11 |
| Q3 FY26 | 804 | 15% | 77 | 11.43 |
| **Q4 FY26** | **1,243** | **16%** | **91** | **13.61** |

### Q4 FY26 Performance vs Street Estimates

| Metric | Actual | Estimate | Variance |
|---|---|---|---|
| Revenue | ₹1,243 Cr | ₹1,508 Cr | -17.6% |
| EBITDA | ₹194 Cr | ₹243 Cr | -20.2% |
| EBITDA Margin | 15.6% | 16.1% | -50 bps |
| Net Profit | ₹91 Cr | ₹172 Cr | **-47.1%** |

**Key reason:** Geopolitical disruption (West Asia conflict) led to last-minute customer deferments, supply chain delays and product timing shifts.

### Cash Flow Concerns

| Metric | FY24 | FY25 | FY26 |
|---|---|---|---|
| **CFO** | ₹70 Cr | ₹-82 Cr | **₹-600 Cr** |
| **FCF** | ₹-312 Cr | ₹-1,031 Cr | **₹-1,841 Cr** |
| **CFO/OP** | 46% | -4% | **-80%** |
| **Working Capital Days** | 66 | -7 | **133** |

**Root Cause:** Smart metering subsidiary (Iskraemeco) — 25% of revenue but 67% receivables. Government installation delays. Core EMS business actually improved WC days from 64→54 days.

**CFO's Commitment:** 70-80% of negative cash flow to reverse within 3 quarters, positive by year-end.

---

## 3. Balance Sheet Health

| Item | FY25 | FY26 |
|---|---|---|
| Equity Capital | ₹64 Cr | ₹67 Cr |
| Reserves | ₹2,776 Cr | ₹4,681 Cr |
| Borrowings | ₹903 Cr | ₹913 Cr |
| Networth | ₹28,373 Cr | ₹47,271 Cr |
| Fixed Assets | ₹845 Cr | ₹1,732 Cr |
| CWIP | ₹391 Cr | ₹372 Cr |
| Investments | ₹132 Cr | ₹257 Cr |
| Debt to Equity | 0.32 | 0.19 |

**Key Observation:** Borrowings stable at ₹913 Cr despite huge capex (₹887 Cr addition to FA + CWIP). Net Debt/Equity at 0.04 — very healthy.

---

## 4. Shareholding Pattern

| Holder | Mar-24 | Mar-25 | Mar-26 | Trend |
|---|---|---|---|---|
| **Promoters** | 57.83% | 57.75% | **53.46%** | ↓ -4.3% YoY |
| **FIIs** | 14.19% | 11.17% | **7.28%** | ↓ -6.9% YoY |
| **DIIs** | 18.36% | 16.98% | **15.13%** | ↓ -1.9% YoY |
| **Public** | 9.61% | 14.10% | **24.12%** | ↑ +10% YoY |
| **Shareholders** | 97,423 | 2,30,533 | **3,78,546** | ↑ +64% YoY |

**⚠️ Red Flags:**
- Promoters diluted their stake by 4.3% in FY26
- FIIs exiting significantly (down 49% from Mar-24 peak of 14.19%)
- Retail/public increasing sharply — often a contrarian signal
- DIIs also reducing their position

---

## 5. Technical Analysis (TradingView — 1D Timeframe)

*As of June 18, 2026 — Price: ₹3,382 (+4.12%)*

### Summary Signals

| Gauge | Signal |
|---|---|
| **Oscillators** | **Neutral** (Sell 0, Neutral 8, Buy 3) |
| **Moving Averages** | **Buy** (Sell 6, Neutral 1, Buy 8) |
| **Summary** | **Neutral** (Sell 6, Neutral 9, Buy 11) |

### Oscillators

| Indicator | Value | Signal |
|---|---|---|
| RSI (14) | 53.06 | **Neutral** |
| Stochastic %K (14,3,3) | 77.34 | Neutral |
| CCI (20) | 134.60 | Neutral |
| ADX (14) | 25.00 | **Buy** |
| Awesome Oscillator | -283.07 | Neutral |
| Momentum (10) | 192.90 | **Buy** |
| MACD Level (12,26) | -114.74 | **Buy** |
| Stoch RSI Fast | 100.00 | Neutral |
| Williams %R (14) | -4.10 | Neutral |
| Bull Bear Power | 239.31 | Neutral |
| Ultimate Oscillator (7,14,28) | 50.07 | Neutral |

### Moving Averages

| MA | Price | Signal |
|---|---|---|
| EMA(10) | 3,189 | **Buy** |
| SMA(10) | 3,129 | **Buy** |
| EMA(20) | 3,249 | **Buy** |
| SMA(20) | 3,176 | **Buy** |
| EMA(30) | 3,343 | **Buy** |
| SMA(30) | 3,361 | **Buy** |
| **EMA(50)** | **3,490** | **Sell** |
| **SMA(50)** | **3,663** | **Sell** |
| **EMA(100)** | **3,804** | **Sell** |
| **SMA(100)** | **3,681** | **Sell** |
| **EMA(200)** | **4,312** | **Sell** |
| **SMA(200)** | **4,745** | **Sell** |

### Key Observation

Price is trading ABOVE short-term MAs (10,20,30) but BELOW all medium-to-long-term MAs (50,100,200). This indicates a **short-term bounce within a longer-term downtrend**. The stock is down **-40% in 1 year**.

### Pivot Levels (Classic)

| Level | Value |
|---|---|
| R3 | ₹6,643 |
| R2 | ₹5,099 |
| R1 | ₹4,116 |
| **Pivot** | **₹3,556** |
| S1 | ₹2,573 |
| S2 | ₹2,012 |
| S3 | ₹469 |

### Performance

| Period | Return |
|---|---|
| 1W | +10.89% |
| 1M | +8.10% |
| 3M | -6.46% |
| 6M | -17.07% |
| YTD | -15.91% |
| 1Y | **-40.17%** |

**Analyst Consensus:** **Neutral** with 1-year price target of ₹3,410 (0.82% upside from current)

---

## 6. Revenue Mix & Order Book

### Vertical Split (FY26)

| Sector | FY25 | FY26 |
|---|---|---|
| **Industrial (incl EV)** | 55% | 55% |
| **Automotive** | 25% | 25% |
| **Aerospace, Space & Strategic** | 6% | 6% |
| **Medical** | 2% | 2% |
| **Railways** | 2% | 2% |
| **IoT / IT, Consumer & Others** | 10% | 10% |

### Segment Split (FY26 → Major Shift)

| Segment | FY25 | FY26 |
|---|---|---|
| OEM Turnkey — Box Build | 39% | **28%** |
| OEM Turnkey — PCBA | 43% | **55%** |
| ODM & Product Engineering | 18% | **27%** |

**⚠️ Key shift:** PCBA share increased from 43%→55%, ODM from 18%→27%. Box Build declined from 39%→28%. This shift toward higher-value ODM is positive for margin trajectory.

### Order Book

| Metric | Value |
|---|---|
| Order Book (FY26) | **₹8,367 Cr** |
| Order Book (FY25) | ₹6,597 Cr |
| YoY Growth | **+27%** |
| **OSAT Revenue Visibility** | **₹2,500 Cr+ over next 5 years** |
| **Customer Base** | 500+ customers in 30+ countries |

---

## 7. Management Commentary — Concall Key Takeaways (May 14, 2026)

### Missed Guidance

- FY26 initial guidance was ₹4,500 Cr revenue. Reduced to ₹4,000 Cr mid-year. Actually delivered ₹3,626 Cr.
- **CEO acknowledged:** "Near-term top-line performance did not fully meet market expectations, primarily due to geopolitical disruption, especially the West Asia conflict."
- A major EV OEM customer (2-wheeler) dropped production by **90%** — Kaynes was the single supplier
- Two government orders were delayed despite product testing being approved

### Guidance Philosophy Change

- Management has **stopped providing numerical guidance** altogether
- Now committing to "double the market growth rate" (EMS market growing at 16-18%)
- This is a significant credibility downgrade

### OSAT Update

- Unit 1 fully operational at Sanand
- Unit 2 ready for commercialization by Q2FY27
- PM Modi personally inaugurated the facility
- Revenue visibility of ₹2,500 Cr+ over next 5 years
- Multi-year, multi-million-dollar partnership with Alpha & Omega Semiconductor (AOS)
- First commercial multi-chip module (IPMs) already shipping to AOS
- **Japan push:** Subsidiary Kaynes Semicon targeting Japanese chipmakers, with support from Aoi Electronics (production lines) and Mitsui (materials procurement)

### Working Capital Promise

- Core EMS business saw WC days improve from 64→54 days
- EMS CFO was **₹250 Cr positive** (vs ₹65 Cr last year) — claim of honoring the guidance
- But metering subsidiary (₹971 Cr revenue) has ₹1,365 Cr in receivables
- Commitment: Metering WC issue to reverse **within 3 quarters**

### New Product Development (NPD)

- Target: **30% of revenue from NPD-led solutions** in coming years
- New product launch cycle reduced from 12-18 months to **9 months**
- EV segment grew 28% despite the major customer loss
- Kavach (railway safety) received initial approval, trial orders in execution

### Leadership Changes

- Independent Director Heinz Franz Moitzi resigned (May 29, 2026) citing personal/professional commitments
- New board additions: Dr. M. Annadurai (ISRO veteran), Rajesh Mittal (automotive), S.G. Murali (ex-TVS Group CFO)
- CFO Jairam Sampath missed the call due to health concerns

---

## 8. Recent News (June 2025 — June 2026)

### 🟢 Positive

1. **Japan Semiconductor Push** (June 17, 2026) — Kaynes Semicon targeting Japanese chipmakers with support from Aoi Electronics & Mitsui. Sales reps deployed in Japan, product samples expected in FY26.
2. **OSAT Facility Inaugurated by PM Modi** — India's first commercial multi-chip module launched from Sanand
3. **AOS Partnership** — Multi-year, multi-million-dollar deal for Power Mosfets, IGBTs, IPMs
4. **Mysore Facility Crosses ₹1,000 Cr Revenue** — Major milestone for the flagship unit

### 🔴 Negative

5. **Q4 Earnings Miss** (May 13, 2026) — Profit fell 22% YoY to ₹91 Cr. Revenue miss of ₹265 Cr vs estimates.
6. **Revenue Guidance Cut Twice** — ₹4,500 Cr → ₹4,000 Cr → ₹3,626 Cr
7. **Cash Flow Woes** — CFO at -₹600 Cr. Metering receivables at ₹1,365 Cr against ₹971 Cr revenue
8. **Promoter Stake Drops to 53.46%** — Down 10.1% over 3 years as per Screener
9. **Massive FII Exit** — FII holding dropped from 14.19% (Mar-24) to 7.28% (Mar-26)

### 🟡 Neutral/Development

10. **PCB Unit 1** — Operational by July 2026 at Chennai
11. **Kavach Approval** — Trial orders received, initial field survey completed
12. **Smart Metering** — Full year of operations completed; installation delays being addressed

---

## 9. Key Risks

| Risk | Severity | Detail |
|---|---|---|
| **Guidance Credibility** | 🔴 High | Two consecutive guidance cuts in FY26. Management stopped giving numerical guidance. |
| **Cash Flow Burn** | 🔴 High | -₹600 Cr CFO. Metering receivables 1.4x revenue. Company burning heavily. |
| **Promoter Dilution** | 🟡 Medium | Stake down from 63.57% (Mar-23) → 53.46% (Mar-26). Selling pressure risk. |
| **FII Exit** | 🟡 Medium | FIIs nearly halved their stake in 2 years |
| **Q4 Margin Compression** | 🟡 Medium | PAT margin dropped from 11.8%→7.3% QoQ |
| **Geopolitical Exposure** | 🟡 Medium | West Asia conflict impacting order timing |
| **WC Days Ballooning** | 🟡 Medium | From 63.8 days to 133 days in 3 years |
| **Dilution via QIP** | 🟢 Low | Share count increased (67 Cr vs 64 Cr equity) but funded growth capex |
| **Dividend** | 🟢 Low | Zero dividend — no income for yield-seeking investors |
| **Competition** | 🟢 Low | EMS market growing but competitive pressure from Syrma, Dixon, etc. |

---

## 10. Bull vs Bear Case

### 🐂 Bull Case

1. **PEG of 1.10** — The stock is reasonably valued for its growth. PEG under 1.5 is typically considered attractive.
2. **OSAT + PCB = Structural Moats** — Backward integration into semiconductor & PCB is a unique advantage. No other Indian EMS player has this combination.
3. **₹8,367 Cr Order Book** — 2.3x FY26 revenue. Strong visibility.
4. **India's ESDM Story** — Government PLI schemes, Make in India, China+1 tailwind. EMS market growing 16-18% annually.
5. **Japan Expansion** — New market entry for OSAT services. Aoi Electronics & Mitsui partnerships add credibility.
6. **NPD Target (30% Revenue)** — If achieved, margins will structurally improve as ODM revenue has higher margins than pure EMS.
7. **Core EMS Business Healthy** — WC days improved from 64→54. CFO positive at ₹250 Cr in standalone EMS.

### 🐻 Bear Case

1. **Guidance Integrity Damaged** — Management missed ₹4,500 Cr → ₹4,000 Cr → ₹3,626 Cr. "Double market growth" is vague and unverifiable.
2. **Cash Flow Negative** — -₹600 Cr CFO is a massive red flag for a company that should be generating cash from operations.
3. **Promoters Selling** — Stake dropping every year. With 53.46%, another 3.46% dilution means they go below 50%.
4. **FIIs Exiting** — Smart money is leaving. FIIs went from 14.19% to 7.28% — that's a 49% reduction.
5. **Revenue Concentration Shift** — Box Build (higher value, sticky) declined from 39%→28%. PCBA (lower value, more commoditized) increased.
6. **Stock Down 40% in 1 Year** — The price action is telling a story.
7. **Management Shake-up** — Independent director quit. CFO missed the earnings call. Restructuring ongoing.

---

## 11. Valuation

| Metric | Kaynes | Industry / Peers |
|---|---|---|
| **P/E** | 62.1 | Industry PE: 31.7 |
| **PEG** | **1.10** | Below 1.5 = reasonable |
| **P/B** | 4.76 | — |
| **EV/EBITDA** | ~5.0x (estimated) | — |
| **Earnings Yield** | 2.85% | 10-year bond: ~7% |
| **Graham Number** | ₹930 | Current price: 3.6x Graham |

**At 62.1x P/E:** Kaynes is expensive in absolute terms but the 56.7% 3Y profit CAGR supports a PEG of 1.10 which is reasonable.

**However:** The P/E is 2x the industry PE of 31.7. The premium needs to be justified by sustained superior growth.

---

## 12. Final Verdict

Kaynes Technology is at a **critical inflection point**. It has:

✅ **Structural tailwinds:** India's ESDM boom, PLI schemes, China+1  
✅ **Unique assets:** OSAT + PCB + EMS = integrated electronics player  
✅ **Strong order book:** ₹8,367 Cr with 5-year visibility in OSAT  
✅ **Reasonable PEG of 1.10**  
❌ **Damaged guidance credibility:** Missed ₹4,500 Cr target by ₹874 Cr  
❌ **Cash flow bleeding:** -₹600 Cr CFO with unclear timeline to fix  
❌ **Promoter & FII exit:** Smart money leaving  
❌ **Stock down 40% in 1 year:** Price reflects execution concerns

The management has acknowledged their mistakes and is taking corrective action (Core EMS WC improvement, OSAT ramp-up, NPD focus, Japan expansion). **If they deliver on the cash flow turnaround in the next 2-3 quarters, this could be a buying opportunity near the lows.** If not, the stock could test lower levels (S1 at ₹2,573).

For now, I'd classify Kaynes as a **High Risk / High Reward** play. Not for conservative investors. Wait for at least 1-2 quarters of cash flow improvement and management credibility restoration before adding significantly.

---

*Report prepared by PulkitAIAssistant. Data sourced from Screener.in, TradingView, BSE filings, and company presentations.*