Kaynes Tech & CG Power — Deep Dive Analysis

Kaynes Technology & CG Power — Deep Dive Analysis

Date: June 18, 2026
Model: deepseek-chat (DeepSeek-V3)
Tags:

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Quick Verdict

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1. Kaynes Technology India Ltd

Key Stats (18 Jun 2026)

• CMP: ₹3,358 | MCap: ₹22,512 Cr | 52W: ₹7,705/₹2,995
• P/E: 87.9x (Core: 271x — OI is 67% of PAT!)
• ROCE: 10.6% | ROE: 7.17% | D/E: 0.07
• Sales TTM: ₹2,128 Cr | PAT: ₹254 Cr
• 1Y Return: -43.2%

Technical (TradingView, 1D)

• RSI: 52.11 (Neutral) | MACD: Buy (early)
• Above 10/20/30 MAs, below 50/100/200 → partial recovery, not full trend
• Pivot: ₹3,556 | S1: ₹2,573 | R1: ₹4,116
• Performance: 1W +10%, 1M +7%, 3M -7%, 6M -18%, YTD -16%

Concall Highlights (May 14, 2026)

Key Quotes:

• "Near-term top line did not fully meet expectations" → geopolitical disruption, West Asia conflict
• Guidance credibility damaged: Started year guiding ₹4,500 Cr → toned down to ₹4,000 Cr → actual ₹3,626 Cr
• Management now refusing to give numeric guidance → "we will better our growth... we don't want to attach a number"
• Analysts openly frustrated: "The call is all over the place" — Nitin Arora
• OSAT order outlook: ₹2,500 Cr over 5 years; PCB: ₹300-400 Cr in FY27; OSAT: ₹250-300 Cr in FY27
• Working capital: Core EMS improved from 83→53 days, but metering business (25% of rev) has 67% receivables
• Smart meter business: Received 35 lakh meter orders; management now says "we are not going to take any more orders like this"

Cash Flow

• FY24: CFO -₹78 Cr, FCF -₹213 Cr
• FY25: CFO ₹65 Cr, FCF -₹731 Cr
• FY26: CFO ₹247 Cr, FCF +₹169 Cr ← first positive FCF since FY22

Risk Flags

• 🔴 Other Income 67% of PAT → Core earnings just ₹83 Cr
• 🔴 Promoters -10.1% over 3 years (Screener CON)
• 🔴 FIIs -49% from peak, DIIs -17.6%
• 🔴 WC days 267→486 (Screener data)
• 🔴 Delivery avg 28% → speculative churn, not accumulation

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2. CG Power & Industrial Solutions Ltd

Key Stats (18 Jun 2026)

• CMP: ₹950 | MCap: ₹1,49,592 Cr | 52W: ₹971/₹526
• P/E: 111x (Core: 136x — OI is 16.6% of PAT)
• ROCE: 29.2% | ROE: 21.9% | D/E: 0.01
• Sales TTM: ₹11,331 Cr | PAT: ₹1,317 Cr
• 1Y Return: +40.9%
• Promoter: Murugappa Group (via Tube Investments)

Technical (TradingView, 1D)

• RSI: 64.09 | MACD: Buy | Summary: Strong Buy (14 Buy, 9 Neutral, 3 Sell)
• ALL 12 MAs in Buy mode → textbook golden EMA stack
• Near 52W high (₹971) — no resistance above
• Concern: Volume -52.8% below 20d avg
• Performance: 1W +5.5%, 1M +17%, 3M +36%, 6M +44%, YTD +46%

Concall Highlights (May 6, 2026)

Key Quotes (Amar Kaul, MD & CEO):

• "Record fiscal year" — highest ever revenue, order book, PBT
• Power Systems: Q4 sales +50% YoY! → PBIT margin 23.8% (+287 bps)
• Order book ₹15,719 Cr +59% YoY → strong FY27 visibility
• ₹900 Cr ($99M) US data centre transformer order — single largest export
• CG Semi OSAT: G1 operational, G2 under construction (CY2026)
• ₹3,000 Cr QIP oversubscribed 3x

Key Metrics

• 3 consecutive years of positive FCF → ₹779 Cr (FY24), ₹709 Cr (FY25), ₹477 Cr (FY26)
• FY26 FCF lower due to ₹3,535 Cr capex (OSAT + expansion) — growth capex, not distress
• DIIs 3.4x increase in 4 years (5.28% → 18.01%)
• ₹3.50/sh dividend recommended for FY26

Risk Flags

• 🔴 P/E 111x leaves no room for error
• 🟡 OSAT drag ₹111 Cr in FY26
• 🟡 Volume thinning on rally
• 🟡 WC days 39.7→81.7 (₹2,536 Cr locked)

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Verdict

🏆 CG Power > Kaynes Tech

CG Power: Buy on dips (₹880-920). Quality compounder with superior ROCE, strong order book, institutional support, and Murugappa governance. Valuation premium is justified by execution — but requires quarterly monitoring.

Kaynes Tech: Avoid at current levels. Compelling OSAT/PCB narrative destroyed by broken guidance, promoter selling, and 271x core P/E. Re-evaluate at ₹2,800-3,000 after 2 quarters of OSAT revenue data.

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📂 Related Notes: [[Kaynes-Technology-Overview]] [[CG-Power-Q4-FY26-Results]] [[EMS-Sector-Overview]]