Kaynes Technology's Hyderabad Unit To Operate At Full Capacity Soon

The newly inaugurated manufacturing facility of Kaynes Technology India Ltd. in Hyderabad is expected to start operating at full capacity soon. The homegrown smart meters and electronics manufacturing company’s state-of-the-art facility was inaugurated on August 23.

According to Jairam Sampath, Whole Time Director and Chief Financial Officer of Kaynes Technology, the unit will primarily focus on electronics and smart meters manufacturing.

“The Hyderabad facility is focused towards the EMS business. We have a lot of client orders, and this is right now aimed towards the power distribution equipment factory, including smart meters. This is going to be a very large facility. It was inaugurated this month. We hope it will start working at full capacity in a couple of months,” Sampath told NDTV Profit. 

The unit is also equipped with facilities for plastic moulding, surface mount machines, robotised handling of materials and automated guided vehicles (AGVs). 

Commenting on the future growth path, Sampath said typically the first quarter is a lean season for the company and accounts for only 15-16% of revenue. He added that the remaining quarters contribute more to the company’s growth, with the fourth quarter contributing up to 40%.

He also added that he expects businesses such as railways, automotive and aerospace to improve in the upcoming quarters of the fiscal year compared to the performance in the first quarter of FY25.

“Since we work on an order book, sometimes the blended margins come down a little bit because of the different sectors that we execute or get schedules for. So, we expect this entire thing to improve from Q2 onwards when some of these businesses in railway signalling, aerospace, defence and IT start improving. Industrial, EV and automotive still remain strong segments. So blended margins are also likely to go up in Q2, Q3 and thereafter Q4 will be a fairly good quarter,” he said.

Sampath projected that the company’s Ebitda margin is likely to improve to 15% by the end of the year based on the order book.

“Taking a consolidated look at what we are going to execute, about 15% will be the Ebitda margin by the end of the year,” Sampath noted.

He revealed that the company has been able to make significant progress in its outsourced semiconductor assembly and test (OSAT) vertical, Kaynes Semicon. 

“Over the course, there has been a delay of three months in getting approvals, which we are expecting any time now. During that time, we strengthened our case for advanced packaging and now we have a lot more clients in the area of advanced packaging so that we build a niche for ourselves in the emerging areas of silicon photonics, compound semiconductors and other things,” he said.

The company’s OSAT vertical plans to limit its exposure to legacy packaging businesses to 25% and focus 75% of the business on advanced packaging, according to Sampath. He projected that the company’s OSAT business would be able to generate a minimum of Rs 1,500 crore by FY28.

“If we get our act together a little early and, if all things go as planned, probably we should exceed that number too,” Sampath added.