Kaynes Technology India Ltd. is attempting to revive growth by expanding into semiconductors, printed circuit board (PCB) manufacturing and higher-value design-led products after its shares declined 56% from their peak following repeated misses on its own growth guidance.
The company is moving beyond its traditional electronics manufacturing services (EMS) business to build an integrated electronic system design and manufacturing (ESDM) and original design manufacturing (ODM) platform. At the same time, it is investing in outsourced semiconductor assembly and testing (OSAT), PCB manufacturing and new product development to expand its presence across the electronics supply chain.
The transition comes after a sharp re-rating in the stock. Kaynes Technology delivered a strong rally after listing in November 2022, with the share price rising almost tenfold to a record high of Rs 7,705. Strong earnings supported the rally, with net profit increasing to Rs 364 crore in FY26 from Rs 95 crore in FY23, while revenue grew to Rs 3,626 crore from Rs 1,126 crore over the same period.
However, the company later missed its own revenue guidance several times. As of July 6, 2026, the stock traded at Rs 3,356, down 56% from its peak. The correction also reduced its valuation, with the stock trading at about 62 times earnings compared with a peak price-to-earnings multiple of 203 and below its three-year median of 120.Â
Shift Towards Higher-Value Manufacturing
Kaynes is repositioning itself from a contract manufacturer to a company that designs, develops and manufactures electronic products.
Printed circuit board assembly remained its largest business in FY26, contributing 43% of revenue. Box Build, which combines PCB assemblies with electronic and mechanical components into finished products, accounted for another 39%. Design-led manufacturing, including Internet of Things products, networking solutions and engineering design services, contributed the remaining 18%.
The company plans to increase the contribution from new product development and other value-added solutions to 30% of revenue over the coming years from 18% in FY26.
As part of this strategy, Kaynes is engaging customers at the product design stage instead of limiting itself to manufacturing. It has also reduced the product development cycle to about nine months and is developing proprietary products in smart devices, IoT, brushless drives and gallium nitride technologies.
In the electric vehicle segment, the company has started supplying complete assemblies instead of individual components to increase its share of customer spending.
Kaynes has also expanded through acquisitions. Its smart metering acquisition allows it to provide software, installation, operations and maintenance services alongside hardware manufacturing.Â
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Semiconductors And PCB Expansion
The company is widening its presence across the electronics supply chain through semiconductor packaging and PCB manufacturing.
Its OSAT facility at Sanand has started operations and has launched what management said is India’s first commercial multi-chip module. Kaynes is also developing capabilities to manufacture complex bare PCBs and high-density interconnect boards.
Management said integrating OSAT and PCB operations with its existing EMS business will strengthen its position across the electronics manufacturing value chain.Â
Smart Metering Remains A Challenge
Execution in the smart metering business has emerged as Kaynes’ biggest near-term challenge.
The business contributed Rs 971 crore, or 26.7%, of FY26 revenue. However, delays in executing an order for 35 lakh smart meters increased receivables to Rs 1,365 crore and pushed working capital days to 125 in FY26 from 87 in FY25.
The delays also affected cash flow. Management had guided for slightly negative cash flow, but reported negative cash flow of Rs 600.4 crore.
To reduce execution risks, management said the company will stop accepting end-to-end installation contracts after completing its existing backlog.Â
Growth Guidance Misses Weighed On Sentiment
Revenue growth also remained below management’s expectations.
Kaynes reported FY26 revenue of Rs 3,626 crore, up 33% from a year earlier. However, this was below its original guidance of Rs 4,500 crore and also missed its revised target of Rs 4,000 crore.
Net profit increased 24% to Rs 364 crore, slower than the company’s earlier pace of earnings growth.
Management has not issued specific revenue guidance for FY27 and has instead said it aims to grow at twice the pace of the EMS industry.Â
Semiconductors Could Support Future Growth
Kaynes has an order book of Rs 8,366.3 crore, providing revenue visibility for more than two years.
Management expects the OSAT business to generate revenue of Rs 250 crore to Rs 300 crore in FY27 as production at the Sanand plant ramps up. Unit 2 is scheduled to be commercialised in July 2026.
According to management, the semiconductor business has a demand pipeline exceeding Rs 2,500 crore over the next five years.
The company also plans to use part of its semiconductor output internally while supplying external customers. Management said this approach could reduce component costs, improve technology capabilities and support margins.Â
PCB Business Offers Another Growth Avenue
Kaynes is also expanding into PCB manufacturing as part of its strategy to become an integrated ESDM company.
Management expects the first PCB unit to begin operations in July 2026 and serve sectors including telecommunications, automotive, aerospace and defence.
The company expects the PCB business to generate revenue of Rs 300 crore to Rs 400 crore in FY27. Management said it has secured demand visibility for the next five years and several customers have already indicated future capacity requirements.Â
What Investors Should Watch
Kaynes’ long-term strategy depends on its expansion into semiconductors, PCB manufacturing and higher-value design-led products.
However, the company’s recovery will depend on improving execution in the smart metering business, reducing working capital pressure and consistently meeting its growth targets.
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