Kaynes Technology stock climbs over 16% on solid Q4 earnings, up 394% from IPO price

Kaynes Technology India witnessed a notable surge of 16.11%, reaching ₹2,989 per share, in today's early morning trading session following the release of its Q4 earnings report, which exceeded analyst expectations. 

Post market hours on Thursday, the company released its Q4 and full fiscal year (FY24) performance, posting a significant 74.8% year-on-year increase in Q4 revenue to ₹637 crore. This growth was primarily driven by robust demand across all verticals, notably industrial & EV, aerospace, outer space & strategic electronics, and railway segments.

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The company's Q4 EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) improved by 60.5% year-on-year to ₹95 crore. Notably, the Q4 profit after tax surged to ₹81 crore compared to ₹41 crore in Q4 FY23, marking an impressive increase of 96.8%. The order book also saw a substantial rise from ₹3,789 crore in Q3 FY24 to ₹4,115 crore in Q4 FY24.

Furthermore, the average order inflow per month increased from ₹278 crore in Q3 FY24 to ₹321 crore in Q4 FY24. For the full fiscal year (FY24), the company's revenue stood at ₹1,804 crore, marking a significant 60.3% year-on-year increase, while the profit after tax grew by 92.5% year-on-year to ₹183 crore, according to company's earnings report. 

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Looking ahead, Kaynes Technology India anticipates continued growth for FY25 and beyond, supported by its robust order book, with visibility of similar growth rates and improved margins.

"Kaynes continues to invest in new initiatives and executing projects in newer high-potential segments. These strategic initiatives are poised to strengthen the company's competitive edge and make Kaynes an integrated EMS company. Many new initiatives are in the planning stage to support this strategy. We continue to expand capabilities across verticals with a clear focus on the outlined strategy of continuous expansion of the customer base, with a focus on large accounts with a growing share of value-added services," said Mr. Ramesh Kunhikannan, Managing Director & Promoter, Kaynes Technology India Limited.

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Well positioned

Kaynes Technology India is a leading end-to-end integrated electronics manufacturer, specialising in IoT solutions. With expertise spanning Electronics System and Design Manufacturing (ESDM) services, the company serves various industry verticals, including automotive, aerospace and defense, industrial, railways, medical, and IT/IoT. 

With a track record of serving over 360 customers across 28 countries, including renowned multinational corporations, Kaynes Technology India is well-positioned to capitalise on strong industry tailwinds.

The global semiconductor market is projected to reach trillion-dollar status, with India emerging as a key player in this growth trajectory. Government initiatives, such as the Aatmanirbhar Bharat vision, aimed at positioning India as a global hub for ESDM, further bolster the semiconductor and display manufacturing ecosystem in the country. 

Additionally, government programs fostering talent development within the semiconductor industry contribute to this momentum.

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The PCB market is anticipated to reach $107.7 billion by 2028, with Asia Pacific retaining its position as the largest market. This growth is attributed to the increasing electronic content in automotive applications, consumer electronic devices, and telecommunication products.

Domestically, rising demand from end markets such as wearable electronics, smartphones, aerospace and defense, and the medical sector drives investment in smaller, more compact, and high-performance electronics. 

Moreover, the trend towards computer miniaturisation and government initiatives like Digital India and Skill India, aimed at promoting digital literacy and workforce development, further propel the adoption of laptops and other digital devices.

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Multibagger returns

The company's shares debuted on the secondary market on November 22, 2022, listing at ₹690 apiece compared to the issue price of ₹587. The stock maintained positive growth for 15 consecutive months post listing. 

At current levels, the stock is trading 394% higher than its IPO price, positioning it as one of the most successful IPOs in recent years.

Disclaimer: We advise investors to check with certified experts before taking any investment decisions.