Kaynes Q1 Review: A Comprehensive Analysis
Kaynes has reported its Q1 FY26 results, with a significant uptick in revenue growth. The company has maintained its guidance to reach Rs 45 billion, however, revised its margin guidance from 15.6% to ~17% by FY26.
Q1 FY26 Results: A Detailed Overview
In Q1 FY26, Kaynes reported a 33.6% YoY revenue growth, driven by a 43.3% YoY increase in the industry segment, which contributed 59% to the revenue. The Ebitda margin stood at 16.8%, expanding by ~250 bps.
The company has an order book of Rs 74 billion, mainly driven by aerospace, industrial, and automotive sectors. The OSAT facility development is on track, with estimated revenue starting in Q4 FY26, while PCB manufacturing is expected to begin as planned, contributing to revenue from FY27 onwards.
PL Capital’s ‘Hold’ Rating: An Explanation
PL Capital has maintained its ‘Hold’ rating on Kaynes due to the significant uptick in the stock price. The revised DCF-based target price is Rs 6,367 (up from Rs 6,068), implying a PE of 60x FY27E earnings.
The company’s acquisition of August Electronics is expected to strengthen its North American footprint and provide access to high-value global customers in sectors like energy, petroleum, medical, telecom, and IT.
Estimates and Projections: A Future Outlook
PL Capital has revised upward its FY26/FY27 EPS estimates by 6.1%/5.1%, mainly due to the expansion in Ebitda margin and lower interest expenses following debt repayment from QIP proceeds. Although equity dilution has partly offset the impact on earnings.
The estimated FY25-27E revenue/Ebitda/PAT CAGR is 52.2%/56.7%/54.9%, with Ebitda margin expansion of ~90 bps. The company is expected to maintain its growth momentum, driven by its strong order book and expanding margins.
Investment Advice: A Word of Caution
Investors should exercise caution while investing in the stock, considering the significant uptick in the stock price. It is essential to consult an expert based on individual needs before making any investment decisions.
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