Cabinet Approves One More Semiconductor Unit Worth Rs 3,307 Crore: Electronics Manufacturing Company to set up a semiconductor unit at Sanand, Gujarat
The stock gave multibagger returns of 160 per cent in just 1 year whereas BSE Sensex Index is up by 26.3 per cent.
Kaynes Technology India Limited announced that the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the proposal of its wholly owned-subsidiary, Kaynes Semicon Private Limited, to establish a semiconductor unit in Sanand, Gujarat. This significant development marks a major milestone in India's efforts to build a self-reliant semiconductor ecosystem.
The proposed unit will be constructed with an estimated investment of Rs 3,307 crore. Once operational, it will have the capacity to assemble, test, mark, and pack 60 lakh chips per day. These chips will cater to a wide range of applications, including industrial, automotive, electric vehicles, consumer electronics, information technology, telecom, and mobile phones. The unit's establishment is expected to boost India's domestic semiconductor manufacturing capabilities and reduce reliance on imports.
The approval of this semiconductor unit aligns with the government's ambitious Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India, which was launched in December 2021 with a total outlay of Rs 76,000 crore. This initiative aims to create a vibrant semiconductor ecosystem in the country and promote self-sufficiency in this critical technology.
The establishment of the Kaynes Semicon unit in Sanand follows the approval of three other semiconductor units earlier this year. Tata Electronics is setting up a semiconductor fab in Dholera, Gujarat, while CG Power is building a unit in Sanand. Additionally, Tata Electronics is also establishing a semiconductor unit in Morigaon, Assam. The rapid progress being made on these projects underscores the government's commitment to fostering a robust semiconductor ecosystem in India.
With the cumulative investment of nearly Rs 1.5 lakh crore and a combined capacity of around 7 crore chips per day, these semiconductor units are poised to play a pivotal role in India's technological advancement and economic growth. The establishment of these units will not only create new job opportunities but also attract investments from global semiconductor companies.
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About Kaynes Technology India Limited
Kaynes Technology, a seasoned Indian ESDM player with over three decades of expertise, offers comprehensive electronics solutions from conceptualization to lifecycle support. Serving diverse sectors including automotive, industrial, aerospace, outer space, strategic electronics, medical, railways, IoT, and IT, the company boasts eight advanced manufacturing facilities capable of producing high-mix, high-value products flexibly. Complementing its manufacturing prowess, Kaynes operates service centres in Cochin and Mumbai, catering to railway, aerospace, defence and industrial clients.
Quarterly Results: The net sales increased by 70 per cent to Rs 504 crore, the operating profit increased by 66 per cent to Rs 66.9 crore and the net profit skyrocketed by 106 per cent to Rs 50.8 crore in Q1FY25 compared to Q1FY24.
Order Book: The company's order book surged 22 per cent sequentially to Rs 5,038.60 crore in the first quarter of the financial year 2025, from Rs 4,115.20 crore in the preceding quarter. This robust growth was driven by strong demand across all business segments, with particularly impressive performance in the industrial & EV, aerospace, outer-space & strategic electronics and railways sectors.
The company has a market cap of over Rs 32,000 crore and the current debt of the company is Rs 323 crore. In June 2024, FIIs increased their stake to 14.27 per cent compared to 14.19 per cent in March 2024. The stock gave multibagger returns of 160 per cent in just 1 year whereas BSE Sensex Index is up by 26.3 per cent. Investors should keep an eye on this mid-cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.
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