Kaynes Technology builds electronics for other companies — circuit boards and finished devices that go inside cars, factory machinery, trains, hospital equipment, aircraft and satellites — for over 500 customers across 30-odd countries from 22 facilities. It sells almost nothing under its own brand. It is good at winning the work: revenue grew 40% in the June quarter and the order book stands at ₹8,900 crore, more than two years of sales. It is less good at converting it. Operating margin is 15.6%, return on capital 13.2%, and the business consumed ₹259 crore of cash in the quarter.
On order book, clearly yes — ₹8,900 crore of confirmed work, up about 20% on a year earlier and roughly two and a half years of current sales. On working capital, which matters just as much in contract manufacturing, no: net working capital ran at 190 days in the quarter, 163 on a rolling twelve months, against 122 a year ago. Inventory went from 96 days to 105, deliberately, to cover component lead times now running six to eight months. Kaynes does not disclose factory utilisation.
Debt is not the problem here, and management is deliberately keeping it that way. Borrowings are around ₹800 crore against ₹4,748 crore of shareholders' funds, a debt-to-equity near 0.2, and the approved long-term loans for the semiconductor and circuit board plants have not been drawn — those are being funded internally. The strain shows up as cash rather than debt: ₹1,200 crore has gone into the two new plants so far, with a further ₹850 crore of capex planned this year.
Growing fast; profit and cash are not keeping up. June-quarter revenue rose 40% to ₹946 crore, but operating margin slipped to 15.6% from 16.8% and net profit fell to ₹56 crore from ₹75 crore — a net margin of 6.0% against 11.1%. Depreciation rose 137% on plants that are not yet earning, and interest 31%. Operations consumed ₹259 crore in the quarter, better than the ₹379 crore consumed a year earlier. Management calls FY27 "a difficult year" and expects a couple of quarters before profitability normalises.
Sales are compounding; profit has stalled. Revenue was ₹946 crore in the June quarter, up 40%, and ₹3,626 crore for FY26, up 33% — three-year growth of 48% a year. But June-quarter profit fell to ₹56 crore from ₹75 crore. The growth is also narrower than it looks: core electronics manufacturing grew 53% and the overseas businesses more than quadrupled, while the smart meter business shrank 12% because the company chose to stop supplying customers who were not paying.
Mostly by building, and at a scale that dwarfs its profit. ₹1,200 crore has gone into semiconductor packaging and circuit boards to date — ₹700 crore and ₹500 crore — with ₹250 crore more in transit and ₹850 crore budgeted this year across the two plus core operations. ₹170 crore of government subsidy has been received on the semiconductor side. Acquisitions continue alongside: August Electronics in North America is a year in, and Sensonic, an Austrian railway signalling software firm, was added. Both new plants slipped a quarter on import disruption and are now due to produce from the December quarter.
Worsening, and management expects that to continue for a while. Operating margin was 15.6% in the June quarter against 16.8% a year earlier, and net margin 6.0% against 11.1%. Three things are pressing: depreciation up 137% and interest up 31% on plants not yet producing, the loss of interest income now that the fundraising cash has been spent, and component costs — prices up 10–12% generally, bare circuit boards up threefold, and a 3.3% hit to the quarter's operating margin from currency on imports. Price rises are passed on, but a quarter late.
Not at the moment, and by construction. Return on capital fell to 13.2% from 14.6% and return on equity to 7.7% from 10.3%, while on a rolling twelve-month basis the company puts return on capital at 11.6% against 15.8%. The money raised in June 2025 and the ₹1,200 crore sunk into two plants sit in the denominator; none of it has produced revenue yet. This ratio is a bet on the December quarter, when both plants are due to start billing.
No, and everything else on this page follows from it. FY26 showed ₹364 crore of profit against ₹600 crore of cash consumed, and the June quarter consumed ₹259 crore more. The split management gave is the clearest number of the call: the electronics business billed ₹854 crore and collected ₹847 crore, while the smart meter business billed ₹240 crore and collected ₹88 crore. Meter receivables rose to ₹1,311 crore from ₹1,158 crore in three months. The core business collects; one subsidiary does not.
Founded and run by Ramesh Kunhikannan, now executive vice chairman, with his wife Savitha Ramesh as chairperson and Dr Muthukumar Narayanaswamy as managing director. The group has grown to about 20 companies, twelve in India and eight abroad. What is new this quarter is the tone: management opened the call by naming the criticism it received on working capital and the gap between aspiration and delivery, then reported against it. "We put our foot down saying that we need to make a collection first to make sure that we continue to supply" is a costly decision to have taken, and they took it.
The auditors, K.P. Rao & Co, signed off with no qualifications and nothing flagged for attention. One thing to keep in view: eight foreign subsidiaries were not separately audited — their accounts were prepared by management and the auditors checked only the conversion into Indian accounting standards, not the underlying numbers. With overseas revenue growing more than fourfold in the June quarter, that unaudited portion is getting larger rather than smaller.
Kaynes is trying to be the only Indian company doing all three steps — making the bare circuit board, assembling electronics onto it, and packaging the semiconductor chips that go on top. Most rivals do only the middle one. The evidence that this is more than ambition arrived this quarter: a partnership with Mitsui opening the Japanese market for the packaging business, an entire circuit board plant's capacity requested by one global customer who has already issued a vendor code, and a first satellite in prototype with titanium pressure vessels being built for ISRO and DRDO.
Dixon Technologies, Syrma SGS Technology, Cyient DLM, Avalon Technologies and Amber Enterprises are the listed Indian rivals in electronics manufacturing, and the field is crowded because assembly is a service anyone with a factory can offer. In semiconductor packaging and bare circuit boards there are almost none, because barely any Indian company has built either — which is the whole basis of the case for Kaynes, and also why the two plants opening in the December quarter carry so much weight.
Helping: ₹8,900 crore of orders, core electronics growing 53%, the Mitsui partnership, a global customer taking the whole circuit board plant, and the electric two-wheeler receivable that troubled last year now below ₹100 crore. Hurting: the smart meter subsidiary, which has ₹1,311 crore owed to it and collected ₹88 crore against ₹240 crore of billing; component prices up 10–12% with circuit boards trebled; and a consolidated tax rate of 35% against 23% standalone, because the new subsidiaries are loss-making. At ₹3,660 on 14 August 2026 the share was 67 times last year's earnings.
Growing structurally, and currently short of components. Indian electronics manufacturing is expanding on government incentives and production moving out of China — management put market growth at 17% in the quarter and commits to twice that. But components are scarce in a way not seen since the pandemic: lead times of six to eight months, bare circuit boards priced three times higher and requiring advance payment. That is good for whoever owns a plant in two years and painful for whoever is buying today. Kaynes is doing both at once.
Kaynes is priced for the plants it is building rather than the profits it is earning. At ₹3,660 on 14 August 2026 the share was 67 times last year's earnings, after falling 40% in a year — the rating came down because the price did, not because profit rose. Professional investors have been leaving throughout: institutions hold 17.6% against 33.1% a year ago, and small shareholders have taken the other side. What you are buying is the December quarter, when two plants are supposed to start billing.
Expensive on today's earnings, and the earnings are the argument. At ₹3,660 on 14 August 2026 the share was 67.4 times FY26 earnings of ₹54.31, 5.2 times book value and 6.8 times sales, valuing the company at ₹24,523 crore. Against three-year profit growth that gives a PEG of 1.2, which is the only measure on which it looks reasonable. It is 52% below its ₹7,593 high and above its ₹3,001 low. None of the listed electronics manufacturers it competes with are covered on this site yet, so there is no like-for-like comparison here.
Institutions have been leaving for a year and small investors have absorbed the whole of it. Foreign funds fell from 10.7% to 5.8% over the five quarters to June, Indian funds from 22.4% to 11.8%, mutual funds from 18.9% to 10.5% — 15.5 points of institutional ownership gone. Small individual shareholders went from 13.4% to 28.9%, and their number doubled from 224,620 to 449,428. Two groups looked at the same working capital and reached opposite conclusions; the professionals were right so far, with the share down 40% across the period.
Four holders above 1%, down from eleven a year ago. Nippon India Small Cap Fund holds 3.56%, HDFC Balanced Advantage Fund 3.55%, an individual named Freny Firoze Irani 1.60% and Axis Small Cap Fund 1.19%. Motilal Oswal Midcap Fund held 4.18% in June 2025 and is no longer on the list at all; Kuwait Investment Authority, Baron Emerging Markets and Canara Robeco have gone the same way. Freny Firoze Irani has held a shade over 1.6% in every quarter through the fall — the only name on the register that has not moved.
It raises money and pays nothing out. ₹1,580 crore came in during FY26 and there is no dividend. The share count is up 885% over five years, which sounds alarming until you see the timing: almost all of it predates the 2022 listing, when the count went from 0.68 crore shares to 4.62 crore. Since listing it is up about 15%, mostly the June 2025 share sale. Management says external funding is available and undrawn, so the immediate question is not whether more will be raised but whether the plants start earning first.
A sector, read end to end, and the companies as they are published. Roughly monthly. Nothing else, and one click to stop.
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