💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 50.8% YoY to INR 27,217.52 Mn in FY25. The core EMS segment remains the primary driver, while the newly acquired Iskraemeco smart metering business contributed INR 532.7 Cr in H2 FY25.

Geographic Revenue Split

Not disclosed in available documents, though the company maintains a diversified portfolio across multiple geographies and sectors to mitigate concentration risks.

Profitability Margins

Net Profit Margin improved to 10.80% in FY25 from 10.20% in FY24. Operating Profit Margin stood at 30.20% in FY25, up from 26.30% in FY24, reflecting improved debt metrics and asset turnover.

EBITDA Margin

EBITDA Margin increased by 100 bps to 15.10% in FY25 from 14.10% in FY24, driven by operational efficiency and margin expansion of 62 basis points in core operations.

Capital Expenditure

The company raised INR 1,600 Cr through a Qualified Institutional Placement (QIP) in June 2025 to fund large-scale capex for its upcoming OSAT and HD PCB divisions.

Credit Rating & Borrowing

CRISIL and ICRA maintain a Positive/Stable outlook. The company maintains a comfortable capital structure with a gearing of 0.18x and a total outside liabilities to tangible net worth (TOLTNW) ratio of 0.44x.

⚙️ Operational Drivers

Raw Materials

Key raw materials include high-definition Printed Circuit Boards (PCBs), semiconductor components, and electronic assemblies. These are critical for the EMS and upcoming OSAT divisions.

Import Sources

Not disclosed in available documents, but the company acknowledges a significant dependence on imports for key raw materials.

Capacity Expansion

The High-Definition (HD) Printed Circuit Board (PCB) and Outsourced Semiconductor Assembly and Test (OSAT) divisions are scheduled to become operational in fiscal 2026.

Raw Material Costs

Raw material costs are subject to volatility in commodity prices and foreign exchange rates. The company uses strategic procurement and scale to support long-term margin stability.

Manufacturing Efficiency

Operating efficiency is reflected in a healthy Return on Capital Employed (RoCE) and stable margins, supported by economies of scale and experienced management.

📈 Strategic Growth

Expected Growth Rate

51%

Growth Strategy

Growth will be achieved through vertical integration into the semiconductor value chain (OSAT and HD PCB divisions operational in FY26), scaling high-margin verticals, and integrating the Iskraemeco smart metering business.

Products & Services

Electronic Manufacturing Services (EMS), Smart Meters (Iskraemeco), Printed Circuit Board Assemblies (PCBA), Box Build, and upcoming OSAT services and HD PCBs.

Brand Portfolio

Kaynes Technology, Iskraemeco.

New Products/Services

Launch of OSAT and HD PCB manufacturing services in FY26, expected to significantly enhance the order book and revenue visibility.

Market Expansion

Expansion into the global semiconductor market through OSAT initiatives and strengthening presence in high-growth sectors like Aerospace and Defense.

🌍 External Factors

Industry Trends

The industry is shifting toward domestic semiconductor manufacturing and high-density electronics. Kaynes is positioning itself as an end-to-end partner by adding OSAT and PCB capabilities.

Competitive Landscape

Operates in a competitive EMS environment; focuses on scaling high-margin verticals and driving operational efficiency to maintain a competitive edge.

Competitive Moat

The moat is built on three decades of EMS experience, vertical integration into semiconductors, and a highly diversified end-user base which provides stability against industry-specific downturns.

Macro Economic Sensitivity

Sensitive to regulatory changes in government-linked sectors like Railways and Defense, which can impact project timelines and order flow.

Consumer Behavior

Increasing demand for smart metering and advanced electronic components in automotive and industrial sectors is driving the shift toward high-tech manufacturing services.

Geopolitical Risks

Dependence on imports for key electronic components makes the company vulnerable to global trade disruptions and supply chain bottlenecks.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to regulatory changes in government-linked sectors and incentive-linked programs (PLI schemes) which impact project scale-up and revenue recognition.

Legal Contingencies

Contingent liabilities increased to INR 520 Cr (18% of net worth) in FY25, primarily due to INR 190 Cr in performance bank guarantees for Iskraemeco projects and INR 130 Cr in corporate guarantees for subsidiaries.

⚠️ Risk Analysis

Key Uncertainties

Potential delays in scaling new operational expansions (OSAT/PCB) could impact revenue by delaying the realization of the current order book.

Third Party Dependencies

Significant dependency on third-party suppliers for imported semiconductors and electronic components.

Technology Obsolescence Risk

The company manages technology risk through ERP-integrated processes and a robust internal control system to ensure operational efficiency.

Credit & Counterparty Risk

Receivables are managed through active discounting of invoices under supply chain finance arrangements to maintain liquidity and reduce credit exposure.