Kaynes Technology India Limited

Technology — Electronic Components · NSE

₹3,281.00+₹21.00 (+0.64%)

DalalBaazaar Score

58 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, small-cap size, which brings sharper price swings, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

The 60-second version of Kaynes Technology India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Kaynes Technology India Limited designs, manufactures, and sells electronic modules and solutions in India and internationally.

IndustryElectronic Components

SectorTechnology

Annual revenue₹3,626 Cr

How does it make money?

Turns over ₹3,626 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 12.0% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE32.0%

What is the outlook?

20 analysts covering the stock expect revenue to grow about 38.2% and earnings to grow about 52.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+38.2%

Est. earnings growth+52.1%

Analysts20

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +222% while net margin moved +19% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+222%

Margin effect+19%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 7.7% is weak

Quality vs. Valuation

Company Quality

59/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

48/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

64.0x

3Y Median

136.9x

40 monthly readings · mean 135.6x · range 60.3x–244.9x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 53% below its 3y median of 136.9x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 287% above the peer median of 16.5x.

vs. its own history

Cheap

136.9x median over 40 months · -53%

vs. sector peers

Expensive

16.5x median of 4 peers · +287%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

32.7x

PEG

1.14

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 15.8% to 19.3% over 3 years.
Very low debt
Debt/Equity of 0.19x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 15.9% to 12.0% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 4 high

🔴Debt has risen sharplyFinancial
Total debt is up 490% over 3 years, from ₹155 Cr to ₹913 Cr.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 573% against revenue up 222% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 15.8% to 19.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 53% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 573% against revenue up 222%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 287% above the peer median. That premium needs a reason that persists, or it closes.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
4 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 36% a year✓ 47.7% CAGR
Latest reported year was 40.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 17%✓ 19.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹1,841 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 9%✓ 12.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 4 neutral · 4 weak

Market Cap

₹22,056 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

64.0x

Expensive

Expensive — verify against sector peers

P/B Ratio

4.73x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹51.29

Profitable

Profitable on a per-share basis

ROE

7.7%

Weak

Weak capital efficiency

ROCE

12.0%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.19x

Low

Conservative leverage

Revenue Growth (YoY)

40.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-0.4%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹1,841 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

37.5x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

11.7%

Average

Average margins

Net Margin

8.9%

Average

Average bottom-line conversion

Current Ratio

2.22

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.14

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

3414.8 / 3587.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

21.4

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,126 Cr	₹1,805 Cr	₹2,722 Cr	₹3,626 Cr	+47.7%
EBITDA	₹178 Cr	₹306 Cr	₹506 Cr	₹699 Cr	+57.8%
EBITDA Margin	15.8%	16.9%	18.6%	19.3%	—
PAT (Net Profit)	₹95 Cr	₹183 Cr	₹293 Cr	₹364 Cr	+56.4%
EPS	₹19.61	₹30.28	₹45.4	₹54.45	+40.6%
ROE	9.9%	7.4%	10.3%	7.7%	—
ROCE	15.9%	11.2%	15.9%	12.0%	—
Total Debt	₹155 Cr	₹323 Cr	₹903 Cr	₹913 Cr	+80.7%
Free Cash Flow	-₹100 Cr	-₹295 Cr	-₹1,031 Cr	-₹1,841 Cr	—

🟢 Revenue has grown at 47.7% a year over 3 years.

🟢 EBITDA has grown at 57.8% a year over 3 years.

🟢 EBITDA Margin has risen from 15.8% to 19.3% over 3 years (+3.5 pts).

🟢 PAT (Net Profit) has grown at 56.4% a year over 3 years.

🟢 EPS has grown at 40.6% a year over 3 years.

🔴 ROE has fallen from 9.9% to 7.7% over 3 years (-2.3 pts).

🔴 ROCE has fallen from 15.9% to 12.0% over 3 years (-3.9 pts).

🔴 Total Debt has grown at 80.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹6,894 Cr

Total Liabilities

₹2,132 Cr

Cash & Equivalents

₹109 Cr

Operating Cash Flow

-₹600 Cr

Capex

-₹1,240 Cr

Shareholding (proxy)

Institutional Holding

13.9%

Insider Holding

54.9%

Analyst Consensus

Recommendations

5 Buy · 8 Hold · 9 Sell

Target Price (Mean)

₹3,653.18

+11.3% vs CMP

Target Range

₹2,790 – ₹4,480

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

2 mixed4 general

Kaynes Technology India hosts Q1 FY27 earnings call on Aug 8

scanx.trade, 18 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Kaynes Technology India shareholders approve all 18th AGM resolutions

scanx.trade, 18 Oct

What Kaynes Technology India Can Still Teach You After A 53% Fall

Simply Wall Street, 01 Oct

Kaynes Technology India - 10 Nifty500 stocks that have fallen up to 58% in a year

The Economic Times, 14 Oct

Kaynes Technology Shares Surge 13% as Company Plans Semiconductor Supply Chain Expansion Under ISM 2.0

India Infoline, 29 JulCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Kaynes Technology stock: Down 61% but still not a clear buy

Value Research, 22 May

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health · Growth

MiddlingBusiness Quality · Valuation · Risk

WeakProfitability

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 4 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑