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KAKAYNES

Kaynes Tech Q4 FY25 results (Jan–Mar 2025) and concall

Capital Goods · Concall AI · Call held 16 May 2025

Company page: Kaynes Tech share price, financials & guidance record

Source transcript

Management summary

Kaynes Technology reported robust Q4 FY25 results with strong revenue and EBITDA growth, driven by a surging order book and strategic acquisitions. The company provided optimistic guidance for FY26, projecting minimum 60% revenue growth and 50 bps EBITDA margin expansion. While facing temporary working capital challenges from an acquired entity and lower asset turns due to capacity expansion, management remains confident in its long-term growth strategy, focusing on high-margin segments and global expansion.

Highlights

  • Consolidated revenue for Q4 FY25 grew by 54% YoY to ₹984.5 crores, and for FY25 by 51% YoY to ₹2,721.8 crores.

  • EBITDA margin expanded to 17.1% in Q4 FY25 and 15.1% for FY25, with a 76% YoY growth in Q4 EBITDA to ₹167.9 crores.

  • Order book surged by 60.3% YoY to ₹6,596.9 crores, indicating strong future revenue visibility and margin-accretive orders.

  • Net working capital days improved from 97 to 91 days in FY25, with a commitment to further significant improvement in FY26.

  • Strategic acquisitions like August Electronics (Canada) and Sensonic (AI-based rail safety) are expected to strengthen North American presence, add high-margin customers, and capitalize on technology upgrades.

Concerns

  • Cash flow from operations was negative due to an increase in other non-current assets, primarily related to deferred payments from an acquired subsidiary's pre-agreed contract conditions.

  • Asset turns may appear lower temporarily for a couple of years due to significant capacity build-up for larger, long-term clients, though management views this as a necessary cost of business for future growth.

  • Other expenses in Q4 FY25 jumped sharply from ₹31 crores to ₹101 crores, partly due to reclassification of consumables and higher employee costs for buffering capacity for future global engagements.

Key financials

3 periods

Q4 FY25

  • Revenue
    ₹984.5 Cr
    YoY +54%
  • EBITDA
    ₹167.9 Cr
    YoY +76%
  • EBITDA Margin
    17.1%
  • PAT
    ₹116.2 Cr
    YoY +43%
  • PAT Margin
    11.8%

FY25

  • Revenue
    ₹2,721.8 Cr
    YoY +51%
  • EBITDA
    ₹410.7 Cr
    YoY +62%
  • EBITDA Margin
    15.1%
  • PAT Margin
    10.8%
  • Net Working Capital Days
    87 days
  • Inventory Days
    91 days

Adjusted FY25

  • ROE
    19.4%
  • ROCE
    19.2%

What they filed

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25
Revenue433 396 737
EBITDA73 49 84
Net profit63 38 60
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹6,596.9 Cr

as of 2025-03-31 quantified

60.3% YoY 9.1% QoQ

Inflow this quarter

₹1,534.2 Cr

Execution

executed over 1.5-year timeframe

Composition

  • Aerospace (segment)
  • Industrial (segment)
  • Automotive (segment)
  • Exports (geography) 15%
The order book is very healthy, with most new orders being margin-accretive and contributing to a higher EBITDA profile than the current consolidated average.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed Partially through government subsidies (50% Central, 20-25% State for OSAT eligible capex; 40% State, 25% Central for PC Board), remaining by company, with bridge loans for lag periods.
    • OSAT plant construction in Sanand, Gujarat ₹3,400 Cr
    • HDI PCB plant construction in Chennai ₹1,400 Cr
    • Customer-exclusive EMS facilities at Chamarajanagar
    • Maintenance capex for EMS business
    So just to remind you, the total capex for semicon is like INR3,400 crores and total capex for PC board is about INR1,400 crores. So between this year and next year and maybe some little spillover will be there. We will complete this capex. And then so that by FY '28, we can have significant capacity utilization in the newer businesses. As far as EMS is concerned, I think it's almost now on a self-sufficient mode. ... So the policy is anyway published by government. So in case of, let's say, OSAT Indian Semiconductor Mission, which has published this policy, 50% of eligible capex, which is excluding land and some parts of buildings. So in INR3,400 crores, about INR2,700 crores, we will get 50% from central government and another 20%, 25% from state government, okay, of INR2,700 crores. ... As far as PC Board is concerned, we get significant amount, about 40% plus 25% roughly. So about 65% capital subsidy.
  • M&A August Electronics (Canada) Acquisition · Integrated

    Strengthened North American footprint, added manufacturing capability, gained large high-margin customers, and provides access to global customers not previously accessed.

    Margins are better than the consolidated EBITDA margin; expected to grow organically by 20-25% with an additional 5-10% spillover effect to India business.

    With our recent acquisition of August Electronics in Canada, we have strengthened our North American footprint, added manufacturing capability in Canada and large high-margin customers. ... As far as August Electronics is concerned, without giving you an actual breakdown, the margins are better than -- in terms of EBITDA are better than our consolidated margin. And we have a business which is quite large, say, about CAD 57 million or so is the kind of business, and we're likely to grow also very well.
  • M&A Sensonic Acquisition · Integrated

    Positioned to capitalize on electronics and technology upgrade in the railway sector, particularly with AI-based rail network safety solutions.

    Our majority stake in Sensonic, a global Al-based rail network safety solution company, positioned us to capitalize on the electronics and technology upgrade in the railway sector.
  • M&A Kaynes Space Tech New subsidiary · Announced

    To lead the sector into newer technologies from electronic space, strengthen partnership with ISRO, and become a premier vendor for satellite and launch vehicle components.

    Expected to grow at a high rate with good margins compared to current consolidated EBITDA.

    Also, our acquisition of companies like Sensonic, and our new subsidiary, Kaynes Space Tech are a few steps by our company to lead the sector into newer technologies from electronic space. ... Second, the space by itself offers huge opportunities in terms of satellites, which can be micro, mini or regular satellites and even launch vehicles and so on and components thereof. We've also set up significant capacity and a subsidiary called Kaynes Mechatronics. So our objective is to make sure that the space tech will become a premier vendor for supply of all the parts.

Guidance & targets

Revenue

  • Consolidated Operating Revenue Growth Revenue · FY26 · High confidence minimum 60%
    So in terms of growth numbers for our consolidated numbers this year, we can safely say that minimum 60% growth will be there in operating revenues.

    — Jairam Sampath

  • Total Revenue Revenue · by FY28 · Medium confidence $1 billion
    And so that by FY '28, when the company does $1 billion, we want a significant number to come from these areas, too.

    — Jairam Sampath

Margin

  • EBITDA Margin Expansion Margin · FY26 · High confidence about 50 basis points
    And we also expect about 50 basis points expansion in our EBITDA numbers, too.

    — Jairam Sampath

  • Core Business EBITDA Margin Margin · FY26 · High confidence 15.6%
    So to that extent, this year, FY '26, we are saying that core business will yield another 50 basis points, so about 15.6% EBITDA.

    — Jairam Sampath

  • Core Business EBITDA Margin (Long-term) Margin · Long-term · Medium confidence 15.5-16%
    So you can take around 15.5% to 16% as the kind of number in the core business.

    — Jairam Sampath

Capex

  • OSAT & HDI PCB Plant Construction Completion Capex · 2025 Calendar Year · High confidence by end of 2025 calendar year
    Both the plants' construction is in full swing, and we are in line with meeting the deadlines of completing the construction by year-end.

    — Ramesh Kannan

  • EMS Business Annual Investment Capex · FY26 · Medium confidence ₹300-400 crores
    Maybe so FY '27 onwards, 7% of turnover, so whatever that number is, let's say, four, three or whatever, so about INR300 crores, INR400 crores of investments we do within FY '26, second half and first half of FY '27.

    — Jairam Sampath

Capacity

  • OSAT First Chip Production Capacity · Q2/Q3 FY26 · Medium confidence Q2/early Q3
    And so we will have probably the first chip coming out sometime, if I'm not mistaken, in the second quarter or at least early third quarter.

    — Jairam Sampath

  • OSAT First Production Capacity · Q3 FY26 · Medium confidence Q3
    Third quarter, I think you can fairly expect the first production to happen.

    — Jairam Sampath

  • PC Board Factory Readiness for Full Production Capacity · Nov/Dec 2025 · High confidence November/December
    When it comes to PCB, same problem. These boards after doing our trials and everything, this factory should be ready somewhere in November, December for full production.

    — Jairam Sampath

Working Capital

  • Working Capital Days Improvement Working Capital · FY26 · High confidence significantly
    and we hope to improve the working capital days significantly during FY '26.

    — Jairam Sampath

What to watch in Q1 FY26

OSAT First Chip and Production Timeline

Q2/Q3 FY26
Current Construction in full swing, POC by midyear
Target First chip in Q2/early Q3, first production in Q3 FY26

Why it matters

Verifying the timely commercialization of the OSAT plant is crucial for realizing returns on significant capex and new revenue streams.

Our construction for OSAT plant in Sanand, Gujarat has already started along with construction for HDI PCB plant in Chennai. Both the plants' construction is in full swing, and we are in line with meeting the deadlines of completing the construction by year-end. ... And so we will have probably the first chip coming out sometime, if I'm not mistaken, in the second quarter or at least early third quarter. Third quarter, I think you can fairly expect the first production to happen.

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Risks & concerns

  • Working capital strain from acquired subsidiary's deferred payment terms

    medium

    An acquired subsidiary has pre-agreed contract conditions leading to delayed payments, impacting CFO, but management plans to implement annuity funding to mitigate this.

    Analyst acknowledged

  • Execution delays for new OSAT and HDI PCB plants

    medium

    Despite construction being in full swing, the commercialization and full production for OSAT and PCB plants are phased, with significant portions of the building and revenue generation expected only next year after trials and validation.

    Management acknowledged

  • Temporary lower asset turns due to significant capacity build-up

    low

    While asset turns may appear lower for a couple of years due to investments in new capacity for larger clients, management views this as a necessary cost for long-term growth and increased order book.

    Analyst acknowledged

Q&A highlights

7 direct
Negative cash flow from operations and increase in other non-current assets Direct
So this is a business that we acquired in our subsidiary in the industrial area, and they had orders with pre-agreed contract conditions, which we have to honor. ... So this particular thing has got delayed payment. So the way we have found a way for funding this through annuity funding through some of the banks, which we'll implement in the coming quarter.

Clarified the reason for negative CFO, attributing it to specific legacy contracts from an acquired entity and outlining a plan to address it, indicating it's not a systemic issue.

Asked by Vipraw Srivastava

Sustainability of high margins and order book composition Direct
So this INR6,500 crores odd of orders, which is staying in the order book, the increment has come in aerospace, industrial and automotive. And these are margin-accretive orders. ... Only thing to note is that this order book will get executed over 1.5-year time frame.

Confirmed that the new order inflows are in high-margin segments (aerospace, industrial, automotive) and will contribute to margin expansion, providing confidence in future profitability.

Asked by Praveen Sahay

Financials and strategic impact of August Electronics acquisition Direct
As far as August Electronics is concerned, without giving you an actual breakdown, the margins are better than -- in terms of EBITDA are better than our consolidated margin. And we have a business which is quite large, say, about CAD 57 million or so is the kind of business, and we're likely to grow also very well. We are one of the premier vendors in Canada.

Provided specific details on the acquired company's size and profitability, highlighting its strategic importance for North American expansion and access to new, high-margin customers.

Asked by Deepak Krishnan

FY26 revenue growth and EBITDA margin expansion targets Direct
So in terms of growth numbers for our consolidated numbers this year, we can safely say that minimum 60% growth will be there in operating revenues. And we also expect about 50 basis points expansion in our EBITDA numbers, too.

Management provided clear, quantifiable guidance for the upcoming fiscal year, indicating strong confidence in continued growth and profitability improvement.

Asked by Siddhartha Bera

Capex plans for OSAT and PCB plants and government subsidies Direct
So in case of, let's say, OSAT Indian Semiconductor Mission, which has published this policy, 50% of eligible capex, which is excluding land and some parts of buildings. So in INR3,400 crores, about INR2,700 crores, we will get 50% from central government and another 20%, 25% from state government, okay, of INR2,700 crores. ... As far as PC Board is concerned, we get significant amount, about 40% plus 25% roughly. So about 65% capital subsidy.

Detailed the significant government support for the large OSAT and PCB capex projects, clarifying the funding structure and reducing the company's direct capital outlay.

Asked by Indrajit Agarwal

Commercialization timeline for OSAT and PCB businesses Direct
What we are planning to do is get all the validation that the real building start from next financial year. ... When it comes to PCB, same problem. These boards after doing our trials and everything, this factory should be ready somewhere in November, December for full production.

Provided specific timelines for the critical new OSAT and PCB ventures, allowing investors to track progress towards revenue generation from these significant investments.

Asked by Keyur Pandya

Impact of smart metering business acquisition on current assets and margins Partial
So basically, the other current assets are those receivables, which are termed to be received later. They are not overdues, which we have agreed for a later so when we acquired this subsidiary company, we had two parts of business. ... And also one more part of the business, which we've not talked about yet, but then that is going to add margins to us is software because these companies this company has a significant amount of software solutions.

Clarified the nature of the increased current assets and revealed an additional margin-accretive software component within the acquired smart metering business, providing more context on its financial contribution.

Asked by Aditya Bhartia

Export opportunities and impact of tariff wars Direct
So fundamentally, the aerospace business and some of the automotive, etcetera, now we've got global clients. So they do not only take requirements for the Indian requirements, but also requirements for production outside of that. ... Big OEMs are seriously considering alternative to China. In the sense, they may not replace the entire thing. Obviously, that's a little difficult. But all the new products, etcetera, they will bring to places like India.

Highlighted the growing export potential across key segments and explained how global supply chain shifts and tariff wars are creating opportunities for the company, especially for new product manufacturing in India.

Asked by Sumant Kumar

2 min read 6 chapters

Detailed narrative

Robust Financial Performance Driven by Strong Order Book

Kaynes Technology reported a strong Q4 FY25, with consolidated revenue growing 54% YoY to ₹984.5 crores and EBITDA increasing 76% YoY to ₹167.9 crores, achieving a 17.1% margin. For the full FY25, revenue reached ₹2,721.8 crores (up 51% YoY) with an EBITDA of ₹410.7 crores (up 62% YoY) and a margin of 15.1%.

The company's order book surged by 60.3% YoY to ₹6,596.9 crores, with average monthly order inflow growing from ₹428.5 crores in Q3 FY25 to ₹511.4 crores in Q4 FY25, indicating robust future revenue visibility.

Strategic Acquisitions and Global Expansion

The company's strategic initiatives include the majority stake in Sensonic, an AI-based rail network safety solution company, and the acquisition of August Electronics in Canada. August Electronics, a CAD 57 million business, is expected to strengthen Kaynes' North American footprint, add high-margin customers, and contribute to margins better than the consolidated average.

These acquisitions, along with the new Kaynes Space Tech subsidiary, are part of a broader strategy to expand into new geographies and technologies, positioning the company as a global player in the electronics sector.

Ambitious Growth and Margin Targets for FY26

Management provided optimistic guidance for FY26, targeting a minimum of 60% growth in operating revenues and an expansion of approximately 50 basis points in EBITDA margins. The core business is expected to achieve an EBITDA margin of 15.6% in FY26. Key drivers for this growth include industrial (smart meters), aerospace, and automotive segments, with a projected 15% of FY26 revenue potentially coming from exports.

Significant Capex for OSAT and HDI PCB Plants with Government Support

Kaynes is undertaking substantial capex for new OSAT (₹3,400 crores) and HDI PCB (₹1,400 crores) plants, with construction in full swing and expected completion by the end of calendar year 2025. These projects are significantly supported by government subsidies: 50% from the central government and 20-25% from the state government for eligible OSAT capex (₹2,700 crores), and a total of 65% subsidy for PC Board capex.

The first chip from OSAT is expected in Q2/early Q3 FY26, with full PC Board production by November/December 2025.

Working Capital Management and Asset Utilization

Net working capital days improved from 97 to 91 days in FY25, and the company aims for significant further improvement in FY26 through strategies like supplier-managed inventory and better production planning. While asset turns may temporarily appear lower due to the large-scale capacity build-up, management views this as a necessary investment to cater to larger, long-term clients and accommodate the growing order book, which is increasingly recognized by major global players.

Smart Metering Business and Software Contribution

The smart metering business, acquired previously, contributed to an increase in other non-current assets due to deferred payment terms from pre-agreed contracts. However, management clarified that this is being addressed through annuity funding. Furthermore, this acquisition includes significant software solutions for meter data management, which are expected to add to margins without associated costs, enhancing the overall profitability of the segment.

Summary of a publicly available earnings call transcript; see how call summaries are prepared. Not investment advice.