Target: ₹6,390
CMP: ₹5,793.10
We recently attended the sell-side meeting hosted by Kaynes Technology. The company highlighted in detail its capex and funding plan over FY26-29, including the recently approved projects under the ECMS scheme. It retained its FY26 revenue guidance (cINR45b) and is optimistic about achieving its $1 billion revenue target by early FY28 (trailing 12M), with 25-30 per cent from OSAT+PCB.
Kaynes expects the total cash outlay, including WC, to be ₹11,400 crore over FY26-29, with ₹8,500 crore capex towards OSAT, PCB and new projects under ECMS and the balance to be utilised for WC (₹2,000 crore), core EMS (₹500 crore) and recent acquisitions. As a part of its funding requirement, it estimates an additional debt of ₹1,960 crore, post ₹3,540 crore subsidy.
In H1-FY26, industrial revenue came in at ₹930 crore (EV: ₹180 crore; Industrials: ₹750 crore), of which smart meters constituted ₹450 crore. It expects smart meter business to have an ARR of ₹1,000-1,200 crore over the medium term.
While we remain convinced about its aggressive P&L targets, our concern remains on a meaningful balance-sheet resolution, given the prioritisation of exponential growth and B2B nature of the business.
Factoring in the recent capex and debt guidance, we cut our FY27-28E EPS by 3-5 per cent on increased finance costs, assuming higher bill discounting – which leads to a 4 per cent cut in our TP.