Nomura, in its latest note, observed that the company continues to exhibit “strategic initiatives to sustain the strong growth momentum and address near-term challenges.”
It acknowledged short-term working capital issues triggered by factors such as a bunch-up of many automotive orders in Sept-25 and legacy Iskraemeco collection delays. A major receivable from Power Grid Corporation of India (PGCIL), initially at Rs 3 billion, has already reduced to Rs 2.3 billion as of November and is expected to normalise by the fourth quarter.
Additionally, the company is implementing various measures such as spreading out orders, offering supply chain financing, and bill discounting to reduce the working capital cycle and aims to normalize it to 80-90 days by end-FY26. Positive operating cash flow (OCF) is targeted for FY26E.
Nomura highlighted that smart meter orders remain a focus area, with Kaynes having executed Rs 450 crore worth of orders in 1H FY26 and targeting Rs 800–900 crore in FY26.
The company’s total order book stands at ~Rs 2,000 crore. Further, it pointed to medium-term growth levers such as strong traction from electric vehicle (EV) customers (TVS, MM, etc.), aerospace (including drones and satellites), automotive, and IT segments, among others. Kaynes maintained Rs 45 billion of revenue target for FY26E (including EMS, acquisitions and OSAT).The brokerage also emphasised the company’s new capex cycle, stating, “On new project spends (OSAT+PCB), the company expects ~INR85bn of capex till FY29E, of which INR12.3bn is expected from internal accruals, INR38bn from debt and INR35bn from government subsidies.”It believes the company is doing advanced packaging/multilayer PCB to ensure strong margins and that the strong EMS orderbook and ramp-up of new segments offer high visibility.
In a separate report, domestic brokerage firm JM Financial projects a 21% upside from current levels and has upgraded the stock to a “Buy” with a price target of Rs 7,000. It also expressed confidence in the company’s roadmap.
The brokerage firm highlighted key takeaways from the analyst meet: (1) Confidence in achieving FY26E guidance, (2) Progress in OSAT and PCB facilities being on track, and (3) Capex of ~INR 85bn over FY26-30E in OSAT, PCB manufacturing, and a copper clad laminate facility.
At the same time, JM Financial acknowledged risks like (1) High capex and many new avenues posing as a risk to execution; (2) Coupled with high growth, necessitating higher working capital, which may make incremental dilution inevitable; and (3) A higher working capital cycle, restricting cash flow generation.
Nonetheless, it credited the company’s track record in execution: “We understand that similar concerns existed over its ability to execute when it announced a foray into OSAT and PCB manufacturing. Since then, it has demonstrated excellent execution capabilities, as visible from customers onboarded and orders won.”
While both brokerages flagged the ongoing working capital cycle and execution risks, their commentary remained constructive on the company’s long-term positioning, capex-backed expansion, and diversification across high-growth verticals like EV, OSAT, and PCB manufacturing.
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