Semiconductor stock to buy now for an upside of 45%; Recommended by Jefferies

The shares of the Semiconductor company, specializing in integrated electronics manufacturing and end-to-end IoT solutions, covering the entire spectrum of Electronics System Design and Manufacturing (ESDM) services, are in focus after the leading Global Brokerage firm Jefferies initiated a Buy Target with an upside potential of upto 45 percent.

With a market capitalization of Rs. 35,622.22 Crores, the shares of Kaynes Technology India Ltd jumped upto 0.4 percent, reaching a high of Rs. 5433.80 compared to its previous closing price of Rs. 5411.70.

What Happened

Kaynes Technology India Ltd, engaged in integrated electronics manufacturing and end-to-end IoT solutions, covering the entire spectrum of Electronics System Design and Manufacturing (ESDM) services, is in focus after a leading Global brokerage firm, Jefferies, initiated a Buy Target of Rs. 7,780 on it with an upto 45 percent Upside Potential from the day’s opening price.

The reasons for the “Buy” target

Strong Growth Potential: Kaynes is set for a significant expansion, with Jefferies forecasting a sales and EPS CAGR of 51% between FY25 and FY28. The company has shipped its pilot OSAT order of 900 chips and aims to scale production to 1.5 million chips/day by Q1 FY27, indicating a strong operational ramp-up.

Enhanced Manufacturing Capabilities: Kaynes has secured ECMS approvals for high-density interconnects, multi-layer PCBs, camera modules, and laminates, strengthening its ability to handle complex, high-value manufacturing projects.

Revenue Visibility: The operational milestones, including successful pilot shipments and approvals for advanced components, provide confidence in sustained revenue growth in the medium term.

Working Capital Management: Jefferies expects working capital to remain elevated at around 115 days in the March quarter, which amounts to about 35 to 40% of estimated FY26 sales.

Valuation: Jefferies has set a price target of Rs. 7,780 per share, reflecting confidence in Kaynes’ strong earnings growth potential, scale-up capabilities, and market positioning.

Financials & Others

The company’s revenue rose by 58 percent from Rs. 572 crores to Rs. 906 crores in Q2FY25-26. Meanwhile, Net profit rose from Rs. 60 crores to Rs. 121 crores in the same period.

The company has a decent ROCE of 14.3% and an ROE of 10.7%. It has achieved strong profit growth with a 95.2% CAGR over the last 5 years and maintains a low debt-to-equity ratio of 0.19.

Kaynes Technology India Limited is a leading integrated electronics manufacturer that provides end-to-end and IoT solutions for diverse industries, including automotive, industrial, aerospace, defence, and medical. Founded in 1988 and headquartered in Mysore, Karnataka.

The company offers services from conceptual design and process engineering to integrated manufacturing and life-cycle support. Kaynes is known for its flexible manufacturing capabilities, extensive certifications, and in-house developed IoT intellectual property. 

The company’s order book continues to expand impressively, rising from Rs 5,422 crore in Q2FY25 to Rs 8,099 crore in Q2FY26, marking nearly 49% growth year-on-year. This steady increase through consecutive quarters underscores strong demand momentum, healthy execution capabilities, and a robust project pipeline, positioning the firm well for sustained revenue growth ahead.

FY30 Guidance

Kaynes Technology aims to achieve $2 billion in revenue by FY30, driven by growth in its OSAT and printed circuit board businesses. The OSAT segment targets  Rs 4,500 crore, while the PC Board unit expects  Rs 2,500 crore, highlighting ambitious expansion plans.

To support this growth, Kaynes has a total CapEx of  Rs 3,400 crore for its OSAT business, with 70% funded via government subsidies and the rest from internal investment. So far,  Rs 200–300 crore has been spent, with another  Rs 600–700 crore expected in FY26, underlining a phased approach to capacity building and scaling operations.

The company is a leading integrated and IoT-enabled solutions provider catering to diverse sectors like automotive, aerospace, railways, and medical. With 500+ customers across 30+ countries, it focuses on advanced manufacturing, OSAT, and HDI PCB expansion, and innovation in smart devices, IoT, and AR/VR, positioning itself for strong technological and global growth.

Written by Sridhar J 

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