Record high? This multibagger stock may retest its January peak, rise 20%, says IIFL

Kaynes Technology India shares have slipped 8 per cent from their record high in January 2025, but IIFL Securities’ target price indicates the stock could surpass that level and potentially climb even higher over the next year. On Monday, the stock was trading flat at Rs 7,144. IIFL's target price on this multibagger stock at Rs 8,604 suggests 20 per cent upside over the next 12 months.

Kaynes Technology’s FY25 annual report underscores its ambition to transition from a pure ESDM provider to a comprehensive, integrated electronics player, according to IIFL Securities. The brokerage highlighted Kaynes Technology's ambitions to emerge as a full-stack integrated electronics player, diversifying its presence from pure ESDM to Base PCB and OSAT.

The brokerage further noted advances in leadership and research strength. “IIFL said the company has expanded its senior leadership team to drive the next layer of growth and has sharply ramped-up its R&D team (2x YoY, at 400+).”

Despite increased working capital and a significant jump in capital expenditure—totalling Rs 960 crore, including both organic and M&A-led investments—the company’s balance sheet remains solid with a net debt-to-equity ratio of just 0.1x. The multibagger stock is up 248 per cent in the past two years.

IIFL expects Kaynes Technology to maintain its market-leading growth trajectory, estimating a 44 per cent compound annual growth rate in earnings per share for FY25-28, with an expansion in return on equity anticipated from FY28 as new revenue streams mature.

For FY25, Kaynes achieved industry-leading growth in both revenue (51 per cent) and EBITDA (62 per cent), bolstered by strong momentum in the industrials and automotive sectors, and a notable rebound in gross margins to 30 per cent. The management is optimistic about further improvements in gross margins to 35 per cent, with operating margins reaching 16-17 per cent, underpinned by an enhanced client and product mix.

A strategic shift is underway as Kaynes moves into higher-margin, longer-cycle electronics businesses, supported by government capital subsidies, IIFL said. The Rs 4,300 crore OSAT facility in Sanand, with early-stage clients such as AOS, LTSCT, and Infineon, is projected to generate Rs 1,200 crore in revenue by FY28, with operating margins in the high teens.

Additionally, the HDI PCB plant at Oragadam, which will address India’s heavy dependence on imported advanced boards, is expected to be commissioned in FY27. This facility aims for Rs 800-1,000 crore in revenues by FY28, supported by improved operating margins compared to the OSAT operations. Capex until Q1FY26 is reported at Rs 427 crore for both projects.

Kaynes has also secured growth capital through fundraising, closing two acquisitions—Iskraemeco India (smart metering OEM) and Sensonic GmbH (railway safety systems)—with a combined outlay of Rs 880 crore. A 14 per cent reduction in the cash conversion cycle was recorded, but increased net working capital led to a 186 per cent year-on-year rise in debt, offset by a Rs 1,600 crore equity raise.