Q1 2027 Kaynes Technology India Ltd Earnings Call Transcript
Key Points
- Kaynes Technology India Ltd (BOM:543664) reported a robust 40% year-on-year revenue growth in Q1 FY 2027, driven by strong EMS business performance, which grew over 48%.
- The company secured a robust order book of approximately INR 9,000 crores, with new customer wins including India's second-largest two-wheeler EV manufacturer and global brands from Germany and France.
- Strategic progress in OSAT and PCB businesses remains on track, with commercial production expected from Q3 FY 2027, supported by a new partnership with Mitsui for Japan market access and a government subsidy of INR 170 crores.
- The company received prestigious customer awards from Mahindra, Siemens, and others, reflecting strong quality and delivery performance.
- Management is committed to improving the balance sheet, with a strategic decision to de-grow the smart metering business to focus on collections, and receivables from a key EV customer have been reduced to below INR 100 crores.
- The company experienced a negative operating cash flow of INR 259 crores in Q1 FY 2027, primarily due to a strategic increase in inventory levels and higher receivables in the smart metering business.
- Smart metering revenue declined by 12% year-on-year, and the business continues to face working capital challenges, with receivables increasing to INR 1,311 crores.
- Global supply chain disruptions, including component shortages and price increases of 30-35%, are expected to put pressure on margins in the coming quarters.
- The effective tax rate was higher at 35% due to amortization and losses in new entities, impacting profitability.
- The company's OSAT and PCB ramp-up schedules faced minor timing slippages due to geopolitical disruptions in West Asia, affecting equipment imports and component logistics.
Ladies and gentlemen, good day, and welcome to Kaynes Technology India Limited Q1 FY 2027 Earnings Conference Call hosted by Axis Capital Limited. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Nikhil Kandoi from Axis Capital. Thank you, and over to you, sir.
Thank you, Nirav. Good morning, everyone. On behalf of Axis Capital, I welcome you all to the Q1 FY 2027 earnings con call of Kaynes Technology India Limited. Today, we have with us management represented by Mrs. Savitha Ramesh, Chairperson; Mr. Ramesh Kunhikannan, Executive Vice Chairman; Mr. Muthukumar Narayanaswamy, Managing Director; and Mr. Jairam Sampath, Whole-time Director and Chief Financial Officer.
Now, I will hand over the floor to the management for the opening remarks, post which we will open the floor for Q&A. Thank you, and over to you, sir.
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