Kaynes Technology India Limited has received a credit rating of IND A-/Stable/IND A1 from India Ratings and Research for its bank loan facilities worth INR7,700 million. The rating agency has affirmed existing facilities of INR6,250 million while assigning new facilities worth INR1,450 million, as communicated to stock exchanges on January 24, 2026.

Rating Details and Analytical Approach

India Ratings continues to take a fully consolidated view of the company along with its subsidiaries for the rating review, due to strong operational linkages among them. The rating reflects continued improvement in consolidated revenue, EBITDA, and order book over FY22-1HFY26, supported by timely execution of orders from strong, diversified counterparties.

Strong Financial Performance

The company demonstrated robust growth momentum with consolidated revenue growing 51% in FY25 to INR27,218 million, following strong CAGR of 60% over FY22-FY24. Revenue growth continued in 1HFY26 at 47% to INR15,797 million. The EBITDA margins improved to 15.1% in FY25 from 14.1% in FY24, further expanding to 16.5% in 1HFY26.

The company maintains a robust order book of INR80.9 billion as of 2QFY26, compared to INR65.9 billion as of March 31, 2025, providing strong revenue visibility.

Business Strengths and Diversification

Kaynes Technology has built a strong business profile supported by diversified revenue streams across automotive, industrial & electrical vehicles, aerospace, medical, railways, and information technology segments. No single sector contributes over 60% to consolidated revenue, providing protection against sector-specific downturns.

The company serves over 500 customers with established relationships spanning seven to ten years. Top 10 customers contributed 67% of FY25 revenue, while top five customers accounted for 46%. The share of original design manufacturing business increased significantly to 18% in FY25 from 2% in FY24, enhancing the overall margin profile.

Credit Profile and Liquidity Position

Despite increased gross debt to INR9 billion at end-FY25 from INR3.2 billion in FY24, credit metrics remained comfortable. The company raised INR29 billion through two qualified institutional placements, with INR11.6 billion remaining unutilized at end-1HFY26. Cash and equivalents stood at INR10,563 million as of March 31, 2025, supporting adequate liquidity.

Rating Constraints and Risk Factors

The ratings face constraints from significantly large capex plans of INR47 billion over FY26-FY30, including INR33.1 billion for OSAT facility and INR14 billion for PCB facility. These investments create project-specific implementation risks, with timely completion and product approvals being key monitorables.

Working capital requirements increased substantially, with the cycle elongating to 194 days in 1HFY26 from 126 days in FY25, partly due to the Iskraemeco India Private Limited acquisition. The company also faces technology risks given both projects require new technology from India's perspective, though this is partially mitigated by established experience in electronics manufacturing services.

Outlook and Rating Sensitivities

India Ratings expects sustained double-digit revenue growth over FY26-FY28, backed by robust growth in existing electronics manufacturing business and moderate 10%-15% growth in the smart-meter business. Positive rating action could result from sustained revenue and EBITDA growth, timely completion of capex plans, or improved working capital management without deterioration in credit ratios.

India and Germany have announced a strategic collaboration on semiconductor partnership, as confirmed by the Prime Minister and German opposition leader Friedrich Merz. This development marks a significant step in strengthening bilateral cooperation between the two nations in the critical semiconductor sector.

Strategic Semiconductor Collaboration

The partnership announcement represents a key milestone in India-Germany relations, particularly in the technology and manufacturing sectors. Both countries recognize the strategic importance of semiconductors in modern technology infrastructure and economic development.

Potential Industry Impact

This collaboration could create opportunities for Indian semiconductor and electronics companies. Kaynes Technology India , which operates in the electronics manufacturing services sector, along with other domestic players, may benefit from enhanced bilateral cooperation and technology transfer initiatives.

Bilateral Technology Cooperation

The partnership reflects both nations' commitment to strengthening their semiconductor ecosystems through international collaboration. Germany's advanced manufacturing capabilities combined with India's growing electronics sector could create synergies for mutual benefit.

The announcement comes as countries worldwide are focusing on building resilient semiconductor supply chains and reducing dependencies on single markets. Such partnerships are expected to contribute to global semiconductor supply chain diversification and technological advancement.