Strong revenue growth, profit collapse — metering cash crisis unresolved

Overall revenue ₹946 Cr, +40.5% YoY. Standalone EMS ₹639 Cr (+53% vs ₹480 Cr prior), metering ₹204 Cr (-12%). Blended growth 40.5%.

EBITDA ₹147.6 Cr, 15.6% OPM confirmed. But NPM collapsed -24.4% to 5.9%, driven by depreciation (OSAT/PCB capex), lost QIP income (~2.5% impact), and component cost pass-through lagging.

OCF negative ₹259 Cr (inventory +₹177 Cr strategic, receivables short +₹68 Cr). Improved QoQ but still severely negative, risking year-end cash positive target.

Metering revenue ₹204 Cr (-12% YoY). Receivables exploded ₹1,158 Cr → ₹1,311 Cr (+₹153 Cr, +13%). Got ₹200 Cr collections in first July week (after quarter). No concrete model fix; exploring divestment, promised update in Feb call.

Capex ₹1,200 Cr spent (₹700 OSAT, ₹500 PCB). Validation complete for one customer (semicon logic), trials ongoing (OSAT). West Asia logistics caused minor timing slippage. Target ₹450–500 Cr FY27 full-year. Timeline credible but unproven.

FY26 call committed 'cash positive by year-end.' Now deferred to FY27 year-end. Q1 OCF -₹259 Cr vs ₹379 Cr prior, still deeply negative.

Receivables blew out ₹1,158 Cr → ₹1,311 Cr despite degrowth. Prior call promised resolution; now exploring divestment, no concrete timeline.

Prior calls suggested 30–35% growth; now only commit '2x market growth.' (Market at 17% Q1, so implies 34%, which Kaynes hit at 40.5% EMS). Cited volatility.

NPM fell to 5.9% (-24.4% YoY). Management expects 'couple of quarters' for normalization. Cost inflation (PCB 3x, components 30–35%) won't reverse.

Minor West Asia logistics slippage mentioned, but target Q3/Q4 FY27 commercialization reaffirmed. Validation progressing (one customer done, another in trials).

Overall EMS 40%, metering 28%, blended 48%. Margin hit by depreciation (OSAT/PCB capex), lost QIP income ~2.5%, cost escalation. Normalization in 2 quarters.

Considering options, methodology TBD. Will update in Feb earnings call on de-risk strategy. Management serious on options.

Commercial revenue from Q3 FY27, on track. Trials/validation complete for semicon logic, OSAT validation starting. Customers approved vendor codes.

OCF -₹259 Cr (inventory +₹177 Cr strategic, receivables +₹68 Cr short). Metering sales ₹204 Cr. New orders ₹1,500 Cr (no breakdown given). Q1 FY26 OCF was -₹379 Cr.

Total ₹1,200 Cr spent (₹700 OSAT, ₹500 PCB), plus ₹250 Cr in transit. FY27 plan ₹300 Cr OSAT + ₹300 Cr PCB, but modular based on subsidies/customer needs.

Metering manufacturing + installation/service (8-year ops). Kaynes strong in manufacturing. Exploring divestment of service portion separately; working on model, will update Q3. Enough order book to have controlled growth.

Done all pre-work, studying partnerships, nothing concrete. Will have clear idea Q3 onwards, maybe not next quarter.

Receivables ₹1,765 Cr (start) → ₹1,925 Cr (end). EMS ₹606 → ₹613 Cr (stable). Metering ₹1,158 → ₹1,311 Cr (↑₹153 Cr). Inventory 96 days → 105 days. OCF -₹259 Cr (or -₹235 Cr consolidated depending on definition).

Committed 2x market growth (market 17% Q1, so ₹34%+ internal). Won't commit absolute FY27 number due to volatility. OSAT/PCB FY27 ₹450–500 Cr, internal vs external TBD per business math.

PCB up 3x, components 30–35% but only 10–12% specific inflation. Forex headwind ~3.3% EBITDA impact Q1. Pass-through Q-o-Q, not immediate. Cost escalation (consumables, labor, energy) ongoing. Pricing pass-on lagging.

Difficult year, but will meet requirements. It's a tough year. Not easy, but will manage. Top lines up, bottom lines affected (per RBI/market view).

FY27: ₹300 Cr OSAT, ₹300 Cr PCB, ₹250 Cr EMS. Q1 spent ₹230 Cr all in. Flexible for newer business/subsidies. Funding not a constraint.

Too early to discuss. Last quarter (H2 FY26) PCB companies did fairly well. Crisis only 3–4 months old. Top lines up, bottom lines affected per market view. Won't commit margins.

Inventory 105 days (strategic increase Feb). Debt ~₹800 Cr, D/E 0.3x. Effective tax rate company 23%, consolidated 35% (amortization 3%, Semicon/Circuits intercompany interest 5%, loss-making entities 4%).

Can't name customers. General: both domestic and global customer engagement ongoing. No specific breakdown given.

Operating CF -₹235 Cr (consolidated). Cash profit ₹158 Cr, inventory +₹156 Cr, receivables +₹90 Cr, others +₹145 Cr, tax ₹26 Cr. Fixed assets ₹360 Cr, investment ₹317 Cr, financing ₹263 Cr. Working with numbers.

Challenging time, need balance between offset and growth. Service customer or fail. Strategic top customers have agreements on how to move forward. Will ensure minimum impact but timing delays expected. Faster than peers in industry.

Don't give segment splits. Very strong order book >₹8,900 Cr (added more Q1 than opened/delivered). Strong demand across domestic/global despite inflation. No cuts from PSU/government.

Market grew 17% Q1; Kaynes overall 40%, EMS 48% — on track. Won't commit absolute FY27 number citing volatility. Implies ~34%+ if market stays 17%.

Target for full-year FY27 combined, starting Q3. Capex ₹1,200 Cr spent to date, funding continuing. Customer validation progressing; Mitsui partnership + global EV customer contract close to finalization.

Lost ~2.5% PBT/PAT from QIP income (non-recurring). Depreciation elevated (OSAT/PCB capex), cost inflation (30–35% components, PCB 3x) expected to persist. Pass-through Q-o-Q lagging.

Management acknowledged 'difficult year' but avoided committing to OPM/NPM recovery levels. Defensive tone suggests near-term margin pressure continues.

Stated commitment. Q1 spent ₹230 Cr (₹90 OSAT, ₹90 PCB, ₹50 EMS). Modular expansion if subsidies/customer wins accelerate. Funding not a constraint.

Receivables ₹1,311 Cr (+13% q-q), collections only ₹88 Cr on ₹240 Cr sales. Business deliberately degrown due to WC constraints. Model unresolved; exploring divestment but no concrete strategy or timeline.

OCF -₹259 Cr Q1 (inventory +₹177 Cr strategic, receivables +₹68 Cr). Improved vs -₹379 Cr prior Q1 but still severely negative. Cash positive by FY27 year-end target now at risk if OSAT/PCB ramp delays or metering receivables persist.

NPM collapsed -24.4% YoY to 5.9% despite 40% revenue growth. Driven by depreciation (OSAT/PCB capex), lost QIP income (~2.5%), cost inflation (components 30–35%, PCB 3x). Pass-through lagging Q-o-Q. Management acknowledges 'difficult year' but won't commit recovery timeline or levels.

Capex ₹1,200 Cr spent to date (₹700 OSAT, ₹500 PCB, ₹250 Cr in transit). Revenue minimal to date. Target ₹450–500 Cr FY27 full-year from Q3/Q4 commercialization. Customer validation ongoing (one done, another in trials). If ramp delays or demand softens, capex ROI at risk. West Asia logistics disruption cited as cause of minor timing slippage.

Metering business 60–65% manufacturing, 35–40% service/installation (long-tail 8-year government contracts). Government utilities primary customer base; collections slow and sporadic. Flood disruptions also affecting installations. If government policy shifts or utility budgets cut, metering revenue at risk.