Kaynes' Smart Meter Foray Looks To Tap Mega Growth Potential

Kaynes Technologies India Ltd. inaugurated its new state of the art manufacturing facility in Hyderabad for manufacturing smart meters earlier this month. The company's foray could translate into Rs 400 crore revenues from the segment in the current fiscal.

While smart meters are the focus, the facility is large enough to be expanded to other products in the automotive and aerospace vertical as well, as per an exchange filing on Aug. 23.

This plant is key for the company and has been in the works for a while now. The company forayed into smart meters last year, but now has built capacity of 40 lakh smart meters per year.

The government has been proactive in promoting smart meters as well. India needs roughly 25 crore smart meters across multiple applications such as electricity, water, gas, etc. and till date only one crore smart meters have been installed. This leaves ample room for growth and shows there is an addressable market.

The company's current capacity will lead its entry in the segment. Kaynes has guided for roughly Rs 400 crore in revenue in fiscal 2025 from smart meters and is expected this to double to Rs 800 crore by next fiscal.

Kaynes has presence across key sectors like industrial, automotive, railways, aerospace etc. It has diversified across assembling printed circuit boards across applications, while also making specific products for the industries mentioned.

The company’s first quarter earnings were led by revenue growth of almost 70% coming at Rs 504 crore. While Ebitda saw growth, margins were flat at 13.3%. Net profit also doubled to Rs 51 crore. Kaynes’ order book has also risen to cross Rs 5,000 crore, up 22% from the previous quarter.   

Of this order book worth Rs 5,000 crore, 70% will be executed over four-six years which gives strong revenue growth visibility. Currently, 15% of the order book is for exports in industrial, medical and space and the company expects this share to increase to 20% by fiscal 2026.

The company also has two key ventures which could propel it to the next level of multi-year growth.

The first one is Outsourced Semiconductor Assembly and Testing. OSAT is a part of the whole semiconductor value chain. India is currently completely dependent on imports for all semiconductor applications and investments for these by Indian companies will be a huge step forward. Within OSAT, companies are expected to provide integrated chip packaging and testing.

Kaynes will be taking the technology from companies like Globetronics and Ponni Tech, and will give these services in India. The company is building a facility in Gujarat and will be investing close to Rs 4,000 crore. These initiatives while still not manufacturing are a key first step for eventual local productions of key inputs in semiconductors.

While the company has guided for some positive revenue impact in fiscal 2026, there is a long term opportunity, with a revenue guidance of Rs 3,500 crore by fiscal 2030.

Printed circuit boards or PCB’s are at the heart of any electronic product and currently 90% of requirement of PCB in India is imported. Kaynes Technologies is investing close to Rs 1,400 crore in establishing a manufacturing presence for Bare PCBs in India.

Certain PCBs are more detailed and have anywhere between 6-10 layers too. Kaynes is looking to eventually manufacture these products over the next few years. The process is complex, needing sourcing key raw materials and setting up a facility to manufacture the eventual PCBs.

The company has guided for revenues to cross Rs 3,000 crore for fiscal 2025, while maintaining margins at 15%. For fiscal 2024, the company recorded revenues of Rs 1,804 crore with margins at 14.1%.

The company has a revenue guidance of roughly $1 billion dollars by fiscal 2028.