Kaynes Technology India Limited, a leading player in the electronics manufacturing services (EMS) sector, has reported robust financial results for the first quarter and announced a significant expansion plan in Tamil Nadu.

Q1 Financial Highlights

Kaynes Technology demonstrated strong growth in Q1:

• Total revenue reached ₹6,735.00 million, marking a 34% year-on-year increase
• Operational EBITDA stood at ₹1,130.00 million, up 69% year-on-year
• EBITDA margin expanded by 350 basis points to 16.80%
• Profit after tax (PAT) grew 47% year-on-year to ₹746.00 million, with an 11.10% margin
• Order book expanded from ₹50,386.00 million to ₹74,011.00 million

Expansion Plans and MoU with Tamil Nadu Government

Kaynes Circuits India Private Limited, a wholly-owned subsidiary of Kaynes Technology, has signed a non-binding Memorandum of Understanding (MoU) with the Government of Tamil Nadu. The agreement outlines plans for a substantial investment in the state:

• Proposed investment of approximately ₹4,995.00 crores over a 6-year period
• Establishment of manufacturing facilities, including greenfield projects and capacity expansions
• Focus on producing Multilayer PCBs (up to 74 layers), HDI PCBs (up to 8 layers), and Flexible PCBs
• Production of high-performance laminates for advanced electronic applications

The MoU aims to explore financial incentives, industrial policies, and potential structured assistance packages offered by the Tamil Nadu government. In return, the state government has agreed to provide necessary facilitation and support, including assistance with infrastructure and regulatory clearances.

Business Outlook and Strategy

Kaynes Technology is transitioning from a pure EMS provider to an integrated ESDM (Electronic System Design and Manufacturing) company. This strategic shift is evident in the following areas:

• Increase in ODM (Original Design Manufacturing) portion from 10% to 20% of the portfolio
• Expansion into advanced packaging and semiconductor assembly
• Diversification across multiple sectors including automotive, industrial, electric vehicles, aerospace, defense, and railways

The company maintains its full-year guidance of ₹4,500.00 crores in revenue, comprising:

Upcoming Projects and Timelines

Kaynes Technology has outlined several key projects in the pipeline:

• OSAT facility in Sanand: Expected to begin commercial production by December
• Multilayer HDI PCB plant in Chennai: Targeted for operational readiness by January
• Kavach project (railway safety system): Currently in the pilot phase, with commercial operations expected to commence soon

Management Commentary

Ramesh Kannan, Managing Director of Kaynes Technology, commented on the results: "Our performance this quarter has not only been strong in absolute terms but is also setting industry benchmarks for the growth of EMS companies in India. Despite facing macroeconomic headwinds and global uncertainties, Kaynes has stood resilient, consistently delivering on our strategic priorities."

Jairam Sampath, Whole-Time Director and CFO, added: "We're seeing margin expansion across all sectors, with increases ranging from 50 to 200 basis points at the gross margin level. This, coupled with our strategic shifts and upcoming projects, positions us well for sustained growth and profitability."

As Kaynes Technology continues its growth trajectory and strategic expansion, the company appears well-positioned to capitalize on the growing demand for electronic manufacturing services and advanced technological solutions in India and beyond.

Kaynes Technology India Limited (KTIL) has taken a significant step towards expanding its manufacturing capabilities in Tamil Nadu. The company's wholly-owned subsidiary, Kaynes Circuits India Private Limited, has signed a non-binding Memorandum of Understanding (MoU) with the Government of Tamil Nadu, outlining a proposed investment of approximately ₹4,995.00 crores over the next six years.

Investment Details and Scope

The MoU focuses on establishing new manufacturing facilities, including greenfield projects and capacity expansions within Tamil Nadu. This strategic move aims to bolster Kaynes Circuits' production capabilities in the state, potentially creating new job opportunities and contributing to the region's economic growth.

Government Support and Incentives

As part of the agreement, Kaynes Circuits will explore various financial incentives and industrial policies offered by the Tamil Nadu government. These may include:

• Subsidies and other financial benefits
• Structured assistance packages
• Infrastructure support
• Assistance with regulatory clearances

The Tamil Nadu government, through its nodal agency Guidance, has committed to providing necessary facilitation and support in line with applicable laws and policies.

Kaynes Circuits' Technological Prowess

Kaynes Circuits India Private Limited specializes in producing advanced electronic components, catering to critical applications across various high-tech sectors. Their capabilities include:

• Multilayer PCBs up to 74 layers
• HDI PCBs up to 8 layers
• Flexible PCBs

These components are crucial for industries such as:

• Aerospace
• Defense
• Artificial Intelligence
• Medical Devices
• Telecom Infrastructure
• Smartphones and Wearables

Additionally, the company is involved in Copper Clad Laminate (CCL) manufacturing, producing high-performance laminates suitable for high-frequency applications, radars, and low signal loss systems.

Implications and Future Outlook

While the MoU represents a statement of mutual intent rather than a legally binding obligation, it signifies a strong commitment from both Kaynes Technology and the Tamil Nadu government to foster growth in the state's electronics manufacturing sector. This investment, if realized, could position Tamil Nadu as a key player in India's electronics manufacturing landscape, particularly in advanced and specialized components.

As the electronics industry continues to evolve rapidly, Kaynes Technology's expansion plans align with the growing demand for sophisticated electronic components in various tech-driven sectors. The successful implementation of this MoU could not only boost the company's production capabilities but also contribute significantly to India's push towards becoming a global electronics manufacturing hub.

Investors and industry watchers will be keenly observing the developments following this MoU, as it could potentially impact Kaynes Technology's market position and financial performance in the coming years.