Kaynes Technology India Ltd Management Discussions

Global Economy

The IMF projects global economic growth of around 2.8% in CY 2025, marking steady progress despite persistent macroeconomic and geopolitical shifts. This pace, though moderate compared to historical highs, reflects endurance and the rising impact of structural reforms, digital advances, and innovation-led recovery strategies.

Advanced economies are expected to expand at an average rate of 1.4%, supported by stable consumer demand, improving labour markets, and a gradual shift towards more supportive monetary policies. The US remains a key driver for global demand. Meanwhile, European economies are benefiting from easing inflation and stable energy prices.

Japan, too, is witnessing signs of recovery, driven by wage growth and a rebound in domestic spending.

Emerging markets are leading the global growth cycle, with expansion expected to exceed 3.7%. India ranks among the fastest-growing major economies, projected to grow 6.2% in CY 2025. This expansion is backed by strong consumption, digital infrastructure development, and targeted investments in manufacturing and renewable energy.

Southeast Asian economies are experiencing renewed momentum in exports and industrial production. At the same time, China, growing at 4.0%, continues to contribute meaningfully through its focus on high-tech manufacturing and clean energy.

Global supply chains are evolving as companies diversify their manufacturing bases. India, Vietnam, and Mexico are emerging as strong alternative hubs for electronics, semiconductors, and sustainable technologies. These shifts are driving fresh investments, strengthening local expertise, and generating jobs across industries.

Central banks in key markets are working to balance growth with price control. With inflation beginning to ease, they now have greater room for flexible policies. This shift is reviving business confidence and encouraging economic activity across sectors.

Governments are stepping up efforts to build economic longevity. Strategic investments in areas like digital infrastructure, education, healthcare, and green technologies are expected to lift productivity and unlock long-term growth potential. Despite external headwinds, the global economy continues to demonstrate adaptability through innovation, workforce transformation, and expanding global collaboration.

The evolving economic environment is unlocking fresh opportunities across regions and sectors. Moreover, the growing emphasis on sustainability, technological self-reliance, and diversified manufacturing is laying the groundwork for a more balanced and inclusive global growth trajectory in the coming years.

(Source: https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/world-economic-outlook-april-2025)

*Note: E – Estimated, P – Projected

*Emerging and Developing Asia includes key emerging economies such as India, China, Indonesia, Malaysia, Philippines, Thailand, Vietnam, Bangladesh, Pakistan, and other countries classified by the IMF as emerging markets in the Asia-Pacific

(APAC) region.

Note: For India, data and forecasts are presented on a fiscal year basis, with FY 2024-25 (starting in April 2024) shown in the 2024 column. Indias growth projections are 6.5% in 2025 and 6.2% in 2026 based on the calendar year. (Source: https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/world-economic-outlook-april-2025)

Indian Economy

Indias economy in FY 2024-25 stands out as the worlds fastest-growing major economy. The nations GDP expansion is estimated at 6.5% for FY 2024-25, propelled by robust domestic demand, a dynamic services sector, and a manufacturing resurgence, supported by targeted government initiatives.

The Production-Linked Incentive (PLI) scheme and Atmanirbhar Bharat have notably boosted high-value manufacturing, particularly in electronics, pharmaceuticals, and semiconductors. These programmes are also reducing import dependency in sectors like defence and telecom.

Simultaneously, digital infrastructure continues to transform the financial ecosystem, with record volumes of UPI transactions highlighting improved financial inclusion and efficiency. Inflationary pressures have moderated, with the Consumer Price Index (CPI) easing to 2.82% in May 2025, and the Wholesale Price Index (WPI) was 0.39% in

May 2025, reflecting continued disinflation. However, core inflation remains somewhat elevated due to services costs.

(Sources: https://mospi.gov.in/sites/default/files/press_release/CPI_PR_12Jun25. pdf, https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2136562

https://rbidocs.rbi.org.in/rdocs/Bulletin/

PDFs/0BULLETIN23072025BDA0155C552742FFAB3740DE11BACE00.PDF)

Industrial activity remains robust, evidenced by a 2.6% increase in the manufacturing index and a 4.5% growth in core sectors like steel, cement, and electricity. On the external front, merchandise exports grew by 0.08%, reaching US$ 437.42 Bn. The Indian rupee has depreciated by 2.8% against the US Dollar, influenced by global monetary tightening and capital flow volatility. Despite this, foreign institutional investment rebounded to US$ 5.9 Bn in early FY 2024-25, signalling renewed investor confidence.

[Sources: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2140774, https://eaindustry.nic.in/eight_core_infra/Eight_Infra.pdf, https://www.pib.gov. in/PressReleasePage.aspx?PRID=2122016#:~:text=The%20cumulative%20 value%20of%20merchandise,25%20(April%2DMarch)]

Indias proactive adoption of the China+1 strategy has drawn substantial FDI, especially in electronics manufacturing. Parallelly, the premiumisation trend in consumer markets and improvements in the ease of doing business (now ranked 54^th globally) underscore the economys evolving sophistication and competitiveness.

Despite challenges, Indias structural reforms, fiscal prudence, and strategic supply chain shifts ensure its strong position for sustained, inclusive growth and a rising role in the global economy.

Outlook

India is advancing steadily on a robust economic path, driven by domestic demand and infrastructure development. Industrial revival, a stable agricultural base, and a growing manufacturing ecosystem support this momentum. Export-led services further strengthen the countrys position in global value chains. Additionally, rapid urbanisation, a young workforce, and rising incomes add further drive. Furthermore, automation, green tech, fiscal discipline, and investments continue to reinforce the nations economic resilience.

While US tariffs present challenges, India is well-positioned to capitalise on global shifts. Strategic international alliances and a more favourable tariff structure, compared to rivals like China, are expected to make India an attractive destination for foreign investment. These factors will also boost domestic manufacturing.

Ongoing structural reforms and modernisation efforts are paving the way for sustained high growth. With a focus on creating favourable environments for doing business and strategic policy interventions to address global challenges, India is positioning itself for global economic leadership.

(Source: https://www.thehindu.com/business/markets/trump-us-tariffs-take-effect-live-asia-india-stock-markets-china-trade-april-9-2025/article69429621. ece)

Global ESDM Industry

The global Electronic System Design and Manufacturing

(ESDM) industry is undergoing a significant shift from traditional OEM-led production to integrated system-level partnerships. Companies operating within the ESDM value chain are increasingly providing end-to-end solutions across the product lifecycle—encompassing design, prototyping, assembly, testing, and post-sales support. This evolution is enabling global customers to navigate growing product complexity, improve time-to-market, and reduce total cost of ownership through strategic outsourcing.

As of CY 2024, the global ESDM market stood at

US$ 1,038 Bn, and is projected to reach US$ 1,203 Bn by

CY 2027, translating to a compound annual growth rate (CAGR) of 5.2%. This rate outpaces the expected 4.6%

CAGR for in-house OEM operations, reflecting a global preference for outsourcing to specialised and scalable ESDM partners.

Global PCBA Industry

The global Printed Circuit Board Assembly (PCBA) industry is projected to reach a market size of US$ 740 Bn by

CY 2026, growing at a CAGR of 4.4% between CY 2023 and CY 2026. This robust scale reflects the sectors pervasive role across a wide spectrum of end-user segments, including telecom, IT hardware, automotive, consumer electronics, medical devices, and strategic industries. PCBAs support both high-volume consumer applications and mission-critical, low-volume use cases that demand exceptional precision and reliability.

Serving as the integration point for all electronic components, the PCBA industry plays a foundational role in the global electronics manufacturing ecosystem. As devices continue to become smaller, smarter, and more interconnected, the complexity and performance requirements of PCBAs have intensified. This has elevated their importance not only in final product assembly, but also as a strategic enabler of innovation, quality, and functional efficiency across diverse product categories.

(Source: Axis EMS Sector report, PL Capital EMS sector report)

Indias ESDM Industry Overview

Indias Electronics System Design and Manufacturing (ESDM) industry is experiencing rapid expansion, driven by strong domestic demand, favourable policy interventions, and rising global outsourcing. Valued at 2,091 Bn in FY 2022–23, the industry is projected to grow more than fourfold to reach 9,009 Bn by FY 2027–28, registering a compound annual growth rate (CAGR) of approximately 34%. This growth is anchored in the broader Indian electronics market, which was valued at 10,860 Bn in FY 2022–23, supported by domestic production worth

8,400 Bn during the same period.

While original equipment manufacturers (OEMs) with in-house capabilities continue to account for around 75% of domestic electronics production, the trend is steadily shifting in favour of specialised ESDM partners. These providers are evolving from pure-play assemblers to integrated design-to-delivery solution enablers, allowing OEMs to focus on core innovation, branding, and customer experience, while benefiting from scale, cost and faster time-to-market.

The growing integration of features within electronic products is driving demand for highly complex, multilayer PCBAs. Applications across automotive, medical, and industrial domains increasingly rely on dense layouts and high-reliability boards to meet performance and durability requirements.

Rising disposable incomes, growing rural and urban digital penetration, and a young, skilled workforce are making India a compelling market and manufacturing base. These structural advantages are enabling the creation of globally competitive, cost-effective production capabilities.

The global push for supply chain de-risking is reducing dependency on China. India, alongside nations such as Vietnam and Mexico, is emerging as a preferred hub due to its scale, geopolitical alignment, and improving manufacturing infrastructure.

With Indias growing consumption of electronics and the governments ambitious target to achieve US$ 300 Bn in domestic electronics manufacturing by FY 2025-26, the ESDM industry is well-positioned to capitalise on new opportunities. This demand, along with the increasing labour costs in other countries and the outsourcing trend among large OEMs, makes India an attractive destination for global ESDM providers. Additionally, emerging sectors such as EVs, IoT and electronic security systems (including cameras and storage) are creating new markets in India, fuelled by the ‘Make in India initiative.

Several policy initiatives are catalysing ESDM growth, including the PLI Scheme, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS),

Modified Electronics Manufacturing Clusters (EMC 2.0), and the Phased Manufacturing

Programme (PMP). The Government has also allocated 760 Bn to establish semiconductor and display fabrication units within India.

Segment-Wise Growth Drivers for Indian ESDM

Clean Energy and Electric Mobility

Indias clean energy transition, underpinned by policies such as the FAME II scheme, the PLI scheme for Advanced Chemistry Cells, and the National Mission on Transformative Mobility, is creating sustained electronics demand across the EV and renewable energy value chain.

Solar and Hydrogen

Government targets for 500 GW of renewable energy and the Green Hydrogen Mission are accelerating demand for electronics-driven energy solutions, including smart inverters and grid controllers.

Aerospace and Defence (A&D)

Rising defence allocations and a modernisation agenda are fostering demand for indigenous, high-reliability electronics. Over the next decade, the Indian defence sector is expected to consume electronics worth

70–72 Bn, supported by a growing ecosystem of localised design and manufacturing partners.

Communications and Digital Infrastructure

Telecom and satellite

The phased removal of duty exemptions and the rollout of 5G are creating opportunities for local EMS players to meet high-frequency and low-latency electronics needs. ISROs increasing demand for indigenous satellite electronics is also fuelling growth.

IoT and connected ecosystems

Strategic partnerships are emerging in IoT-enabled applications across healthcare, utilities, and logistics. Use cases include remote diagnostics, predictive maintenance, and asset tracking, all of which require scalable electronics manufacturing support.

Electric Vehicles (EVs)

Supported by schemes such as FAME and Make in India, EV adoption, particularly in the two-wheeler segment, is driving demand for chargers, controllers, and battery management systems.

Automotive Electronics

India is positioning itself as a global automotive R&D hub, underpinned by increasing investments and consumer demand for advanced electronics. Technologies related to vehicle safety, comfort, connectivity, and energy efficiency are accelerating PCBA content per vehicle

Railways and Transportation Infrastructure

Public–private partnerships, along with government investment plans amounting to US$ 750 Bn by 2030, are upgrading railway and metro infrastructure. This is driving demand for signalling systems, safety electronics, and intelligent control interfaces.

Industrial Electronics and Automation

The move towards Industry 4.0, combined with policy support under the PLI scheme, is boosting demand for power electronics, smart metering, and process automation systems. These are especially relevant in sectors such as chemicals, energy, and large-scale utilities.

(Source: PL Capital EMS sector report)

Indias PCBA Industry

The PCBA industry in India is gaining strategic prominence as electronics manufacturing evolves into a high-value, innovation-driven sector. With a market size of 2,310 Bn (US$ 31 Bn) in FY 2022–23, the industry is projected to reach 6,556 Bn (US$ 88 Bn) by FY 2025–26, registering a remarkable CAGR of 41.6%. This growth is underpinned by increasing demand for precision electronics, rapid miniaturisation, and the rising adoption of high-speed assembly technologies.

As product architectures become more complex and time-to-market pressures intensify, PCBAs serve as the operational core that integrates electronic components across applications such as mobile devices, electric vehicles, industrial automation, and telecom infrastructure. To strengthen domestic capabilities and deepen local value addition, India is actively incentivising PCBA-focussed manufacturing through a combination of fiscal support, infrastructure development, and policy-driven ecosystem building.

These efforts not only aim to make India self-reliant in key electronics manufacturing functions but also enhance its role as a global hub for high-quality, export-ready PCBA solutions.

(Source: PL Capital EMS sector report)

Company Overview

Kaynes Technology India Limited (also referred to as ‘Kaynes, ‘KTIL, ‘The Company or ‘We) stands as a leading provider of end-to-end IoT-enabled integrated electronics manufacturing services (IEMS). We offer a full spectrum of services across the entire electronics value chain. With over thirty years of expertise, we have established ourselves as a trusted partner to global OEMs in high-growth, high-reliability sectors including Automotive, Industrial, Railways, Medical, Aerospace & Defence, and Consumer Electronics.

We operate a network of advanced manufacturing facilities in India, strategically located across Mysuru, Bengaluru,

Manesar, Selaqui, Bhiwadi, Chennai, Hyderabad, and Pune, each equipped with SMT, THD, cable harnesses, and RoHS-compliant infrastructure. Our facilities are designed to support both high-mix, low-volume and scalable, high-volume production requirements. In FY 2024–25, we further expanded our global footprint through a design and interface office in the US, and the acquisition of Sensonic GmbH in Austria, strengthening our capabilities in the rail electronics segment.

The Company offers a diversified portfolio of services including:

OEM Turnkey Solutions

Covering design, manufacturing, and after-sales support.

ODM Design Services

Ranging from concept co-creation and PCB layout to prototype development and validation.

Embedded Design and IoT Solutions

Focussing on AI and ML-enabled embedded systems, smart metering, and asset tracking.

Product Engineering and Box Build

Offering complete product lifecycle services, including prototyping, New Product Introduction (NPI), and system integration.

Our innovation-led approach is anchored by a DSIR-recognised R&D centre in Mysuru and design hubs in Bengaluru and Ahmedabad, supported by a 75+ member R&D team. As we continue to evolve as a vertically integrated electronics player, we are expanding into HDI

PCB manufacturing and semiconductor OSAT services through Kaynes Semicon, reinforcing our commitment to import substitution and advancing the Make in India vision.

Operational Overview of Business Verticals

Industrial (Including EV)

The Industrial segment is a key growth driver, supported by a strong order book and an expanding global client base. We serve electric two-, three-, and four-wheelers, EV infrastructure such as DC fast chargers and power modules, and Industry 4.0 applications including automation, robotics, and clean energy systems. Our portfolio has advanced to high-value, complex EV assemblies. Smart metering is a major growth area, strengthened by the acquisition of Iskraemeco India Private Limited, which brought advanced technology and a healthy pipeline, including 3.5 Mn meters in Gujarat and additional volumes in West Bengal. As an EMS partner to AMISPs, we offer integrated manufacturing, testing, and software capabilities, enabling timely collections and expansion into gas and water meters.

Aerospace

The Aerospace segment is shaping up to be a major contributor to future growth with strong order inflows and growing customer engagement. We have secured important contracts from a US-based OEM, for which we have set up a dedicated manufacturing facility. Execution is expected to pick up pace next year. To support this, we are strengthening our infrastructure and expanding our talent pool. With long-term promise and higher yields, this segment holds significant strategic value.

Medical

The Medical segment delivered healthy growth with the addition of a large European client, opening multiple RFQs and deepening our presence in global med-tech. We manufacture products including endoscopy carts, X-ray units, dental imaging systems, ICP sensor modules, and diagnostic analysers. The segment is margin-accretive and aligns with our high-value, low-volume focus. Investments in capability and regulatory compliance aim to scale operations further. We are also exploring opportunities to provide large OEMs with end-to-end EMS solutions, paving the way for recurring, long-term revenue streams.

New GreenfieldProjects: OSAT and HDI PCB

We are undertaking two strategic greenfield investments aimed at expanding our capabilities across the electronics manufacturing value chain. These projects will strengthen both backward and forward integration around our core EMS platform.

Upstream Capability - HDI PCB Manufacturing

Our HDI PCB facility, located at our Chennai campus in Tamil Nadu, enables front-end value addition through in-house production of multilayer, high-density interconnect boards. These are essential for compact, high-speed electronics used in applications such as smart meters, automotive systems, and industrial controls. This capability enhances design integration, quality control, and supply chain efficiency across our EMS value chain.

Railways

The Railways segment saw a temporary execution pause due to regulatory approvals and specification finalisation. We are developing onboard electronic units for the Kavach train safety system with a German technology partner, targeting Proof of Concept completion in FY 2025–26. Deliveries of fully integrated units will begin once approvals are secured. The acquisition of Austria-based

Sensonic GmbH, with expertise in rail electronics, enhances our offering in signalling and control systems. With the governments focus on modernisation and safety under the Kavach programme, we see strong long-term growth prospects in this vertical.

IoT, IT, Consumer and Others

This diversified segment is gaining momentum with increasing demand from government and private sectors. Our solutions integrate product engineering, embedded electronics, and IoT capabilities, including smart controllers, sensors, and connected devices. We are executing a large IT project for a government client and have begun receiving RFQs for similar programmes. In parallel, we are enhancing software and design capabilities to deliver more intelligent, value-added solutions. The segments share is expected to rise in the near term, driven by greater adoption of connected and intelligent systems across industries.

Automotive

The Automotive segment is a core business vertical, backed by over three decades of expertise in design, engineering, manufacturing, and life-cycle support for global Tier 1 suppliers and OEMs. Our portfolio covers Cluster PCBAs, LED lighting PCBAs, various switch PCBAs, and BCU Master / Slave PCBAs, all meeting automotive-grade standards. Growth is accelerating in the EV ecosystem, where we supply components for electric two-, three-, and four-wheelers, as well as for DC fast chargers and power modules. Recent order wins from leading Tier 1 companies, including the top three globally, are largely margin-accretive and have strong export potential. With a stable seven-year average relationship across top automotive clients, this vertical is well positioned for sustained growth and margin expansion.

Core Integration - EMS Platform

Our core EMS platform spans PCB assembly, box build, embedded systems, and IoT-enabled solutions. These capabilities form the midstream of the value chain, translating upstream inputs into fully integrated electronic systems for global OEMs across high-growth sectors.

Downstream Expansion - OSAT Facility

The upcoming OSAT (Outsourced Semiconductor Assembly and Testing) facility in Sanand, Gujarat, extends our capabilities into the semiconductor backend. By offering chip assembly, packaging, and testing, we align with post-fabrication requirements of global semiconductor clients. This expansion positions us in a high-value segment that complements and extends our EMS offerings.

Financial Highlights

FY 2024-25 saw growth for the Company, with consolidated revenue rising to 27,218 Mn, up 51% from 18,046 Mn in

FY 2023-24. Operational EBITDA climbed by 62%, reaching 4,107 Mn, reflecting improved scale and efficiency

60%, amounting to 2,934 Mn, supported by a margin expansion of 62 basis points. These results reflect our focussed execution, financial discipline, and solid growth momentum.

Risk and Mitigation

At Kaynes, we prioritise proactive risk management, understanding its critical role in sustaining performance and long-term PAT surged value creation. Our Board of Directors oversees the risk management framework, which is regularly updated to respond to evolving business environments, operational complexities, and external uncertainties.

Talent Development and Workforce Capability Enhancement

Kaynes Technology recognises that building future-ready talent is integral to sustaining our growth in a fast-evolving electronics manufacturing landscape. We are committed to developing a skilled, agile, and purpose-driven workforce through continuous investments in training, reskilling, and upskilling. Our hiring and talent development practices are aligned with our strategic priorities, focussing on both technical proficiency and cultural alignment.

To support capability building across the organisation, we deliver structured learning programmes spanning advanced manufacturing technologies, quality systems, functional excellence, and leadership development. These programmes are tailored to individual roles and career stages, ensuring relevance and long-term impact. We also facilitate cross-functional exposure and on-the-job learning to deepen domain knowledge and promote innovation-led thinking.

Employee well-being and engagement are integral to our approach. Through a combination of health, safety, and support initiatives, we aim to maintain a productive, balanced, and inclusive work environment. As of 31 March,

2025, our total workforce stood at 6,199, reflecting our continued emphasis on attracting, developing, and retaining high-calibre talent across all locations.

Internal Control Systems Supporting Operational and Financial Discipline

Kaynes Technology has established a robust internal controlsystemtoensurefinancialaccuracy, operational efficiency, and regulatory compliance across its manufacturing and business functions. These controls are designed in alignment with the Companys scale, operational complexity, and growth strategy. They are embedded into daily activities through defined policies, ERP-integrated processes, and clear functional accountability.

We maintain strong internal financial controls to ensure that all transactions are properly authorised, accurately recorded, and reported in a timely manner, in line with applicable accounting standards. Where possible, we have embedded control checkpoints into automated workflows across procurement, production, inventory, and finance to enable traceability and consistency.

Internal audits are conducted periodically based on a risk-based audit plan approved by the Audit Committee of the Board. These reviews help us assess the effectiveness of our control systems and identify opportunities for continuous improvement. Through this structured approach, the Company upholds high standards of governance, transparency, and operational discipline.

Quality Control Statement

At Kaynes, quality is integral to how we operate and deliver. We have structured our approach to ensure that each product and service meets customer expectations, as well as applicable regulatory standards. A thorough qualification process is in place across the value chain, reflecting our focus on precision and reliability.

Regular evaluations are conducted at our manufacturing units, along with audits by independent agencies and customers. This ensures all our processes remain compliant and performance-driven. By continuously monitoring these aspects, we strengthen product integrity and foster ongoing improvements in line with the evolving needs of the industry.

Cautionary Statement

This report may contain statements that reflect the

Companys anticipated outlook, objectives, or performance estimates. These ‘forward-looking statements are subject to various uncertainties and risks that may cause actual outcomes to differ from those projected. Influencing factors include regulatory changes, macroeconomic developments, legal proceedings, and shifts in market dynamics across our domestic and international operations. Readers are advised to interpret these statements with caution. The Company disclaims any obligation to update such ‘forward-looking statements or to be held liable for decisions based on the information provided herein.