India became the fourth country to land a spacecraft on the moon when its Chandrayaan-3 lander and rover touched down near the lunar south pole in August. Linked in a small but significant way to that historic achievement is little-known Kaynes Technology India, an electronics manufacturer headquartered in Mysore, a city close to the tech hub of Bangalore. Kaynes supplied electronic systems that were used to power both the rover and the lander during the successful mission.
Shares of the company, which had already trebled since its debut on the Bombay Stock Exchange in November 2022, gained another 40% after its role in the moon mission became public, making founder Ramesh Kunhikannan, 60, a billionaire. His estimated net worth is now $1.1 billion, derived largely from his 64% stake in Kaynes.
The company, which gets more than half of its $137 million annual revenue from manufacturing printed circuit board assemblies, is a supplier of electronic systems and design services to a raft of industries, from automotive and aerospace to medical and defense. Kaynes’ products are used in everything from electronic controls in electric vehicles to ventilators and railway signals.
“The electronics industry is still at a very nascent stage in India,” says Rajeev Khushu, former chairman of the India Electronics and Semiconductor Association, an industry group. “But Kaynes started very early. It stayed in India and invested in India at a time when most people went outside. It was a niche player but it stuck with the vision and is benefitting from that.”
Thanks to the increasing use of electronics across industries, the company’s annual revenue has nearly tripled from $49 million in fiscal 2020, while net profit has risen ten-fold over the same period to reach $11.4 million in the fiscal year ended March. Revenue for the six months ended September was up 39% to $78 million, with net profit jumping 84% to $7 million. The company expects revenue to come in at $208 million in the fiscal year ended March 2024.
As a key domestic player with nine factories, Kaynes Technology is poised to benefit from India’s fast-rising $18 billion (revenue) electronics system design and manufacturing (ESDM) market. The industry is projected to grow four-fold to $73 billion by 2027, according to consulting firm Frost & Sullivan. This is expanding at a faster clip than the global ESDM industry, which was forecast to clock revenue of $1.15 trillion by 2026 from $880 billion as of 2021, as per Frost & Sullivan.
With its strong order book, revenue growth at Kaynes is expected to outpace the industry, note Sumant Kumar and Meet Jain, analysts at Mumbai investment firm Motilal Oswal in a November report. The duo project that the company’s revenue and net profit will grow at an annual compounded rate of 41% and 56%, respectively, over the next three years.
Kunhikannan, who graduated from Mysore’s National Institute of Engineering, founded Kaynes in 1988 as a contract manufacturer of electronics. In 1996, his wife Savitha Ramesh joined him and is now the company’s chairperson. In recent years, Kaynes has benefited from the Indian government’s “Make in India” program, aimed at boosting local manufacturing. The China-plus-one strategy of global companies looking to diversify their supply chains, has also given a boost to India’s homegrown manufacturers.
Looking to position India as an electronics manufacturing hub, the government is going all out to woo manufacturers with tax subsidies and earmarking large land parcels for their factories. Part of this ambition is to make semiconductors in India and get global chipmakers to set up Indian fab factories.
Kaynes Technology has quickly latched on to that opportunity and in October announced that it will be investing $340 million to build a semiconductor assembly and test unit in Hyderabad, in neighboring Telangana state. The company, which has acquired 46 acres of land near Hyderabad airport and aims to start production in 18 months, is awaiting final approval from the government.
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