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Time of India
2 days ago
- Business
- Time of India
Kaynes & Avalon Poised for Strong CAGR Through FY27 on Scale; Motilal Oswal sees over 20% upside each
India's Electronics Manufacturing Services (EMS) sector is witnessing rapid growth, supported by a strong order pipeline, ongoing capacity additions, and improving global relevance. The industry is expanding across segments, backed by rising work content, better execution visibility, and a gradual shift towards higher-margin categories like aerospace, industrial, automotive, and critical infrastructure. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Kampong Krabei: Unsold Furniture Liquidation 2024 (Prices May Surprise You) Unsold Furniture | Search Ads Learn More Undo Order inflows remain firm, aided by new client additions, margin-accretive contracts, and prototype-to-production conversions. The cumulative order book for the EMS space (excluding Amber and Dixon) rose 23% YoY to INR 163 billion in FY25, highlighting the sector's robust growth momentum. Several macro drivers are fuelling domestic electronics demand, including higher investments in surveillance, the evolution of electric vehicles and AI applications, and ongoing infrastructure upgrades. Low penetration of consumer electronics and rising income levels also support long-term growth. Additionally, the increasing involvement of both global and Indian players is strengthening the local value chain. Government-led initiatives such as the Production-Linked Incentive (PLI) and Electronic Component Manufacturing Scheme (ECMS) are further accelerating investments across segments like semiconductors and display modules. Live Events EMS companies are scaling up operations to match growing demand. New plant setups, export-oriented units, and investments in areas like OSAT and HDI PCB manufacturing are progressing well. These initiatives cater to rising needs from regions such as Europe, GCC, and North America, while also enabling broader product offerings. Most players saw margin improvements in FY25, a trend likely to continue, boosting earnings predictability. In summary, the EMS industry is on a strong growth trajectory, supported by favorable demand dynamics, increasing exports, and deepening domestic integration. With a supportive policy environment, expanding capacities, and growing importance in global supply chains, the sector is well placed to maintain its growth momentum in the foreseeable future. Kaynes Technologies: Buy| Target Rs 7300| LTP Rs 5770| Upside 26% It is poised for strong FY26 growth with a revenue target of INR45b, driven by higher-margin new orders, operating leverage, and expansion across key verticals such as automotive, aerospace, industrial, and medical. Recent acquisitions have enhanced its global presence & opened new growth opportunities, with future focus on high-margin ODMs & expansion in South Asia & Europe. HDI PCB and OSAT units are expected to commercialize by 4QFY26, targeting INR25b revenue in FY27 and INR50b by FY28, with robust margins (~30%/20%). We estimate revenue/EBITDA/PAT CAGR of 57%/61%/70% over FY25–27, driven by scale and margin gains. Avalon Technologies: Buy| Target Rs 1030| LTP Rs 828| Upside 24% Company's long-term revenue trajectory is anticipated to be strong, backed by: 1) the addition of new customers in the US and Indian markets, 2) order inflows from the high-growth/high-margin industries, such as clean energy, mobility, and industrials, 3) strategic collaborations and 4) venturing into advanced technology segments. Management guided for 18-20% revenue growth in FY26, with gross margins of 33-35%. Strategic collaborations (e.g., with Zepco) and capex plans to expand capacity will support future growth. We expect a CAGR of 28%/40%/58% in revenue/EBITDA/adj. PAT over FY25-FY27. (The author is Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd ) ( Disclaimer : Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Economic Times
23-06-2025
- Business
- Economic Times
BEL shares in focus after securing Rs 585-crore defence orders; June tally nears Rs 3,500 crore
Shares of Bharat Electronics Ltd (BEL) will be in focus on Monday after the state-owned defence electronics major announced fresh orders worth Rs 585 crore, adding to a string of recent wins that have pushed its total order inflow for June to nearly Rs 3,500 crore. ADVERTISEMENT Also Read: 11 Nifty mid & smallcap stocks that can rally 40-90% over the next 12 months In a stock exchange filing on Friday (June 20), BEL said the new orders include fire control systems, missile sighting systems, communication equipment, jammers, critical spares, and associated services. This follows BEL's strategic partnership with Tata Electronics, announced on June 6. The two firms signed a memorandum of understanding (MoU) to jointly pursue opportunities in semiconductors and advanced electronics, including chip design, OSAT (Outsourced Semiconductor Assembly and Test), and fabrication. The move aligns with India's push for self-reliance in high-tech on June 4, BEL had announced Rs 537 crore worth of new contracts for advanced communication systems, shipborne equipment, jammers, simulators, and other defence electronics. That was followed by a major Rs 2,323 crore order from Mazagon Dock Shipbuilders and Garden Reach Shipbuilders for base and depot spares to support missile systems on Indian Navy vessels. ADVERTISEMENT With these wins, BEL's total order inflow for June now stands at nearly Rs 3,500 crore, reinforcing its key role in India's defence and aerospace ecosystem. ADVERTISEMENT According to Trendlyne, the average analyst target for BEL is Rs 405, suggesting a slight downside of about 1% from current levels. Of the 23 analysts tracking the stock, the consensus rating remains 'Buy'.On the technical front, the Relative Strength Index (RSI) is at 72.8—indicating overbought territory, which could signal a potential pullback. However, the stock continues to trade above its 20-day, 50-day, 100-day, and 200-day simple moving averages (SMAs), reflecting strong bullish momentum. ADVERTISEMENT BEL shares have gained around 40% year-to-date and delivered an impressive return of 225% over the past two years. The company's current market capitalisation stands at approximately Rs 1.45 lakh crore. Also Read: US strikes on Iran may rattle markets: Will Nifty, Sensex react to escalating geopolitical risk? (Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
16-06-2025
- Business
- Time of India
Top stocks to buy: Stock recommendations for the week starting June 16, 2025
Top stocks to buy (AI image) Stock market recommendations: According to Motilal Oswal Financial Services Ltd, the top stock picks for the week (starting June 16, 2025) are Home First Finance and Kaynes. Let's take a look: Stock Name CMP (Rs) Target (Rs) Upside (%) Home First Finance 1268 1500 18% KAYNES 5478 7300 33% Home First Finance HomeFirst, with 155 branches across 13 states, is sharpening its focus on emerging states with strong infra growth. Technology remains its key differentiator, with 50%+ of sourcing now fully digital and ~75% Account Aggregator penetration as of FY25. Having recently received a credit rating upgrade from both ICRA and India Ratings, coupled with the 50bps repo rate cut by the RBI, HomeFirst is expected to lower its cost of borrowing while supporting NIM expansion. Its strong fundamentals, healthy return ratios, and superior execution reinforce its position as a top Affordable Housing Fin. franchise. We estimate a 30% PAT CAGR over FY25-27E, driven by a proven model and a seasoned, transparent leadership. Kaynes Kaynes Technologies is expanding across EMS, HDI PCB manufacturing, and OSAT, targeting high-tech, high-margin segments. It aims to achieve USD 1 billion revenue by FY28, supported by strong orders in automotive, aerospace, industrial, and medical sectors, along with strategic North American acquisitions. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch CFD với công nghệ và tốc độ tốt hơn IC Markets Đăng ký Undo HDI PCB and OSAT units are expected to commercialize by 4QFY26, targeting INR25b revenue in FY27 and INR50b by FY28, with robust margins (~30%/20%). FY25 revenue rose 51% YoY to INR27b, slightly below guidance due to railway order delays. We estimate revenue/EBITDA/PAT CAGR of 57%/61%/70% over FY25–27, driven by scale and margin gains. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
New Straits Times
15-06-2025
- Business
- New Straits Times
Muted outlook for Malaysia's semiconductor sector amid low factory utilisation
KUALA LUMPUR: The near-term outlook for Malaysia's semiconductor sector remains lacklustre, weighed down by weak end-market demand and poor factory utilisation rates, according to MIDF Research. Following the recently concluded first quarter earnings season, the firm said most outsourced semiconductor assembly and test (OSAT) companies under its coverage delivered disappointing financial performances. Maintaining its "neutral' stance on the technology sector, MIDF Research said the unfavourable utilisation rate led to the OSAT companies under its coverage posting appalling earnings performance. This, it said, has resulted in two downgrades in stock recommendations, namely D&O Green Technologies Bhd and Unisem (M) Bhd to "Trading Sell" and "Sell", respectively. Meanwhile, Inari Amertron Bhd has been upgraded to "Neutra" from "Trading Sell" previously, given the limited downside risk and relatively better earnings resiliency as compared to its peers. MIDF Research expects the earnings for the second quarter to remain relatively stagnant on a sequential basis, given the lack of positive development. "We foresee a more gradual pace of recovery in the second half of this year to make up for the lacklustre first half. "This is in tandem with the World Semiconductor Trade Statistics (WSTS) forecast for 2025, whereby not all segments are expected to show growth," the firm said. The WSTS has maintained its forecast of 11.2 per cent year-on-year (YoY) growth for the global semiconductor market in 2025. For 2024, global semiconductor sales reached US$630 million, slightly above the WSTS forecast by 0.5 per cent. As a result, the 2025 market value is now expected to be US$700.9 million, up by 0.5 per cent. WSTS said growth will mainly be driven by the logic and memory segments, supported by demand for artificial intelligence, cloud infrastructure and advanced consumer electronics. MIDF Research said artificial intelligence (AI) remains the only clear catalyst at this juncture. Meanwhile, the firm continues to see challenges from the smartphone and automotive markets, which is expected to weigh on the performance of the local semiconductor companies. MIDF Research noted that the International Data Corporation (IDC) is now expecting the worldwide smartphone market to grow marginally this year by 0.6 per cent YoY to 1.24 billion units from 2.3 per cent previously in the February 2025 forecast. This is in view of high uncertainty, tariff volatility and microeconomic challenges such as inflation and unemployment across many regions leading to a slowdown in consumer spending. Moreover, IDC is expecting low single-digit growth until 2029 with a five-year compound annual growth rate of 1.4 per cent due to increasing smartphone penetration, lengthening refresh cycles and cannibalisation from used smartphones. The growth for 2025 will be primarily coming from China at 3.0 per cent YoY due to the subsidies. "We do not discount the possibility that the effect of the subsidies could be temporary, as we view that demand to be driven by innovation rather than the subsidies. This is also on top of the economic concerns," MIDF Research said. Meanwhile, Apple is expected to contract by 1.9 per cent YoY in 2025, which the firm said could hinge on the upcoming iPhone 17 launch. "Demand should disappoint if there are only minimal upgrades seen as compared to the iPhone 16 and/or there is a price increase across the various models," it added. Chin said additional cost pressures may also arise from the upcoming revision of electricity tariffs, scheduled for July, which could affect companies' medium- to long-term planning.
Time of India
12-06-2025
- Business
- Time of India
Indian firms target overseas assets to fast-track semiconductor ambitions
Strategic overseas acquisitions by India's nascent semiconductor companies are set to emerge as a key enabler for the country's ambitions in chip manufacturing and assembly, ensuring access to proprietary expertise, precision equipment, and critical intellectual property, experts told ET. Indian firms including Tata Electronics and L&T Semiconductor Technologies (LTSCT) have recently made significant moves to acquire foreign assets even as they invest in greenfield facilities within the country. These acquisitions bring experienced engineering teams and operational know-how, which are essential for upskilling local workforces and establishing robust training pipelines, explained Kunal Chaudhary, partner and co-leader, inbound investment group, at EY India. LTSCT and Kaynes Semicon are jointly acquiring the power modules business of Fujitsu General Electronics, based in Japan, while opto-semiconductor maker Polymatech last year acquired US-based semiconductor equipment provider Nisene Technology Group to build an integrated chip manufacturing business. Tata Electronics is exploring takeovers of semiconductor fabrication and outsourced semiconductor assembly and test (OSAT) facilities in Malaysia. Chaudhary said while India has already built a strong presence in chip design, moving into OSAT — a high-margin segment that includes advanced packaging and assembly — will be key to climbing the value chain. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories With advanced packaging technologies becoming critical to semiconductor innovation, India's entry into this space could enhance its global positioning, he said. After Kaynes and LTSCT announced acquisition of Fujitsu General's power modules business for Rs 118.34 crore on Monday, Kaynes CEO Raghu Panicker said the deal opens up new avenues for advanced semiconductor packaging excellence. 'This move strengthens Kaynes' OSAT capabilities, while aligning with our long-term strategy of supporting global original equipment manufacturers through best-in-class technology and scalable infrastructure,' he told ET. Kaynes is one of the four companies under the India Semiconductor Mission 1.0 building OSATs in the country, while Larsen & Toubro has invested more than $300 million to create its fabless chip company LTSCT. ET on June 3 reported that Tata Electronics is in talks with several global semiconductor companies to acquire a fabrication or OSAT plant in Malaysia. The move is aimed at bolstering the Tata Group company's knowledge and talent base ahead of its ambitious foray into semiconductor fab, assembly and packaging in India. 'Most acquisitions and partnerships at the moment are really about two things: gaining access to trained talent – essentially acqui-hires – and jump-starting work on cutting-edge technologies,' said Prithvideep Singh, general manager at Mohali-based Continental Device India Ltd (CDIL) that has a partnership with German semiconductor manufacturer Infineon Technologies. 'Gaining access to know-how is only half the battle,' he said. 'Transferring it to Indian operations and building capability within local teams…demand years of groundwork, deep technical maturity, and process discipline.' Infineon supplies high performance silicon wafers, and CDIL packages and distributes advanced power semiconductors like MOSFETs and modules specifically tailored for the Indian market, including for electric vehicles and renewables. 'All the JVs and strategic partnerships are a result of the need for Indian entities to build their core competency with best in class proven technology and manufacturing processes,' said Neil Shah, cofounder and vice-president, research, at Counterpoint Research. He noted that matured nodes foundry and back-end packaging OSAT/ATMP are low hanging opportunities for new entrants. 'Building fabs for advanced nodes is still a distant dream for Indian enterprises as there are just three big players like TSMC, the leader, and Samsung and Intel, which are still struggling versus TSMC,' Shah said. 'So, high value fab will take time if at all one of them decides to set up in India in future, if the other ecosystems develop handsomely,' he explained. Biswajeet Mahapatra, principal analyst at Forrester, said acquiring assets of foreign entities allows Indian companies to access advanced technologies like wafer-level packaging, 2.5D/3D integration, and chiplet-based designs, which are critical for modern semiconductors. By leveraging foreign expertise and infrastructure, Indian companies can reduce reliance on imports for high-end packaging solutions and meet the growing demand from global OEMs like Apple and Intel, he explained. For the broader ecosystem, overseas acquisitions and partnerships can help bridge critical capability gaps. Given the current talent crunch in India, they offer a smart and often necessary path for companies entering the sector, experts said. But the real challenge lies in how effectively that know-how is embedded into Indian operations and scaled with consistency and quality, they added.
