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Kaynes TechQ2 FY25

Kaynes Tech Q2 FY25 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹3,505P/E: 67.8Market Cap: ₹23.6K CrSector: Industrial Manufacturing

Management growth scorecard

Revenue

Category 1

Margin

Category 1

Fundraise

Yes

Order

Yes

Capex

Yes

5 of 5 growth signals are positive — a strong management growth story.

Full analysis

Revenue guidance

Category 1
  • The company expects a sustained high growth trajectory over the next decade driven by:
  • - Import substitution potential of around USD 12-13 billion, allowing scaling of production and orders.
  • - Organic growth at about 10% annually in core business, aided by increased domestic production and localization efforts.
  • - Additional growth from new sectors like aerospace, railways, and space programs expected from FY26 onwards.
  • - Expansion enabled by lifetime orders from customers (e.g., aerospace and automotive models spanning 6-7 years plus service).
  • - Export revenue expected to grow to approximately 20% of business by FY26 and potentially one-third over a 4-year horizon.
  • - New projects in OSAT and HDI PCB manufacturing starting revenue contribution from FY26-Q4.
  • - Company aims to achieve INR 3,000 crore revenue in FY25 and target to triple current business by FY29.

See what Kaynes Tech management said on margin guidance — free account, 30 seconds.

Fundraise plans

Yes
- The company expects to sustain 50-60% growth largely through internal cash flows and operational efficiency. - Operating cash flow (OCF) is forecasted to generate about 7% of total sales, sufficient to self-fund growth. - Plans to improve asset utilization efficiencies from FY26 onward will aid cash flow. - Inventory and receivables management improvements are expected to result in positive operating cash flow by year-end. - For the EMS business, they anticipate self-funding entirely through OCF. - However, for new projects like OSAT and HDI PC board, additional funding might be necessary. - No explicit mention of new fundraising through debt or equity in the near term. - The company is focused on maintaining a shorter working capital cycle and generating positive cash flows to fund expansion. In summary, Kaynes Technology currently plans to fund growth primarily through internal cash generation and operational efficiencies, with no immediate plans announced for raising debt or equity.

See what Kaynes Tech management said on order book — free account, 30 seconds.

Capex plans

Yes
  • OSAT project underway in Sanand, Gujarat with government capital subsidy approvals (state and central). Significant revenues expected from Q4 FY26.
  • HDI PC board project approved in Chennai; construction underway and revenues expected from Q4 FY26.
  • Telangana factory phase one for smart meters operational; phase two construction started.
  • Acquisition of Iskraemeco secured, opening a potential revenue opportunity of ~INR6,500 crores over several years; helps Kaynes become a leading smart meter supplier in India.
  • Plans for additional investments in assembly of chips and high-density boards over three to four years to balance technological impact and create value.
  • Focus on self-funding growth through operating cash flow and efficient asset utilization from FY26 onwards.

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Margin guidance

Category 1
  • Kaynes expects sustained high growth for a decade driven by organic growth, import substitution, and export opportunities.
  • Core business growth is projected at around 10% annually as it settles.
  • Import substitution offers significant additional growth potential, particularly in electronics manufacturing, over the next 5-10 years.
  • The company has a target to triple revenues from around INR3,000 crore in FY25 to about INR9,000 crore by FY29.
  • Exports are expected to grow from current low levels to around 20% of revenue by FY26 and potentially one-third in 4 years.
  • Operating EBITDA margin is improving, expected to exceed 15% in FY25, supported by high-margin segments like industrial, railway signaling, aerospace, and smart meters.
  • The company aims for self-sustained growth, partly funded by operating cash flow generating around 7% of sales.
  • Strong order books and lifetime contracts for aerospace and automotive provide revenue visibility and margin stability.

Order book

Yes
  • Current order book stood at approximately INR54,228 million at the end of Q2 FY25, up from INR50,386 million in Q1 FY25.
  • Average order inflow in Q2 was around INR340 crore per month.
  • The company expects a 12-month order book ranging between INR3,600 crore to INR4,500 crore as of September.
  • Orders are typically booked for varying execution periods, from 6 months up to 5-10 years for aerospace.
  • Forward-looking, the company has orders well in time, with coverage for the next 2-3 years.
  • Some orders termed "upside book" are in progress but not finalized yet.
  • Execution expected to ramp up, particularly in the second half of FY25, aiming for over INR3,000 crore revenue this year.
  • Large OEM aerospace orders have been received, with manufacturing setups already constructed.

How does Kaynes Tech rank vs peers in Industrial Manufacturing?

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What Kaynes Tech's management said in earlier quarters

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