Jefferies has reiterated its “Hold” rating on Kaynes Technology with a target price of ₹4540. Following a recent management meeting, key takeaways indicate that the company’s core Electronics Manufacturing Services (EMS) business is performing well, with an order book of ₹50 billion as of June 2024, marking a 22% increase quarter-on-quarter.
Kaynes Tech boasts the highest operating profit margin (OPM) in the sector, ranging between 13-14%, setting it apart from its EMS peers. The company also achieved OSAT (Outsourced Semiconductor Assembly and Test) approval in September 2024, a key milestone in its growth trajectory.
The company aims for $1 billion in sales by FY28, implying a robust compound annual growth rate (CAGR) of 47% between FY24 and FY28. Additionally, Jefferies estimates that Kaynes’ sales and earnings per share (EPS) will grow at CAGRs of 42% and 48%, respectively, over FY24-27.
Despite these growth projections, the stock’s valuation remains high, with a forecasted price-to-earnings (PE) ratio of 65x for FY26, prompting Jefferies to maintain a cautious “Hold” stance.
Disclaimer:
The information provided in this article is based on publicly available data and research reports, such as Jefferies’ analysis of Kaynes Technology. It is intended for informational purposes only and should not be considered as financial advice or a recommendation to buy or sell any securities. Investors should perform their own due diligence and consult with a licensed financial advisor before making any investment decisions. The views expressed in this article are those of the sources and do not necessarily reflect the opinions of Business Upturn or its partners. Neither Business Upturn nor the author(s) assume any liability for any financial losses or damages that may arise from the use of this information.
