Kaynes Technology’s Revenue Is Growing 33%, but Receivables Are Shooting Up 166%; What Is Happening to Its Cash Flow?
Kaynes Technology has shown strong revenue growth, but the rapid rise in working capital poses challenges for investors. While revenue has increased significantly, trade receivables have surged even more, indicating that a larger share of the revenue is not being converted into cash promptly. This situation raises concerns about the company's cash flow management.
Kaynes Technology India was recently trading around ₹3,645 per share, with a market capitalization of roughly ₹24,503 crore and a trailing P/E of around 70x. The stock's 52-week range was approximately ₹2,995–₹7,705.
Receivables Are Rising Much Faster
The scale of the increase is the first major warning signal. Trade receivables rose by roughly ₹953 crore in one year , while revenue increased by about ₹904 crore,a 33 percent growth. At the same time, the company's FY26 receivable days increased to 134 from 84 days , indicating that customers were taking significantly longer to pay. Motilal Oswal also reported that net working-capital days increased to 125 days from 87 days in FY25, and trade receivables rose by 166% from ₹575 crore (FY25) to ₹1,528 crore (FY26).
This means Kaynes has had to finance a much larger operating cycle. Revenue can continue growing on the income statement, but unless those sales are collected, the growth can consume rather than generate cash.
Cash Flow Tells a Different Story
The impact is visible directly in the cash-flow statement. Kaynes' net cash from operating activities fell to negative ₹600 crore in FY26 from negative ₹82 crore in FY25 . This happened despite FY26 profit before tax of roughly ₹504 crore . The biggest working-capital drains were the increase in trade receivables and inventory.
The company's consolidated cash-flow statement shows a ₹1,024 crore negative impact from the increase in trade receivables and a further ₹289 crore outflow from higher inventory. This creates the core analytical issue: Kaynes is profitable on an accounting basis, but cash generation has not kept pace with reported growth.
Smart Metering
Management has directly linked much of the working-capital pressure to its smart-metering business. During the Q1 FY27 earnings call, management said it deliberately slowed the metering business because it wanted to prioritize collections and strengthen the balance sheet.
The latest numbers provide more detail. At the beginning of Q1 FY27, metering receivables were around ₹1,158 crore , increasing to ₹1,311 crore by the end of the quarter. In contrast, EMS receivables moved only slightly from ₹606 crore to ₹613 crore . Management also said GridCrest generated around ₹240 crore of sales against only ₹88 crore of collections during the quarter, prompting the company to slow production and supplies.
This suggests that the cash-flow pressure is not evenly distributed across Kaynes' businesses . The core EMS operation appears to be handling collections much better, while smart metering is absorbing substantially more working capital.
Inventory Is Adding to the Pressure
Receivables are not the only issue. Consolidated inventory increased from approximately ₹814 crore in FY25 to ₹1,103 crore in FY26 , a rise of around 36%. Management explained that the inventory increase was partly deliberate. Because of global component shortages and longer lead times, Kaynes chose to build inventory to protect production and customer deliveries.
During Q1 FY27, management said inventory increased by another ₹150 crore and that some semiconductor and electronic components were facing lead times of six to eight months. So the cash-flow problem is broader than collections alone. Customer receivables, strategic inventory and expansion-related spending are all competing for cash.
Capex Makes the Cash Requirement Larger
Kaynes is also investing aggressively as it moves beyond traditional EMS into semiconductors, PCB manufacturing, and other higher-value businesses. FY26 capital expenditure was approximately ₹1,240 crore , while the company continued spending on OSAT and PCB capacity.
Management said FY27 spending is planned at around ₹300 crore each for OSAT and PCB and ₹250 crore for the EMS business , with spending being kept modular depending on customer additions and subsidy flows. This means Kaynes is simultaneously dealing with two cash demands: funding working capital today and building capacity for future revenue.
Is the Cash-Flow Problem Temporary?
There are some indications that management expects the situation to improve. In Q1 FY27, Kaynes said it had received roughly ₹200 crore from its GridCrest business in the first week of July and expects to become cash-flow positive on a consolidated basis by the end of FY27. Management also plans to provide rolling 12-month working-capital metrics to make the trend easier to track.
At the same time, the company is not simply cutting growth. Q1 FY27 revenue rose 40% YoY to ₹946 crore , EBITDA increased 31% to ₹147.6 crore , and management said the core EMS business grew by more than 48%.
Conclusion
Kaynes Technology's working-capital problem is significant, but the data suggests it is closely linked to rapid expansion and the smart-metering business rather than a broad deterioration across every operation. FY26 revenue grew 33%, yet receivables surged 166%, working-capital days rose from 87 to 125 and operating cash flow deteriorated to negative ₹600 crore.
The next few quarters will therefore be critical. Investors will need to watch whether metering collections improve, receivable days decline, inventory normalises and operating cash flow turns positive. Management has already indicated that the balance sheet is now a priority and has slowed metering growth where collections are inadequate.
The central question for Kaynes is no longer only how fast it can grow revenue. It is whether that growth can increasingly be converted into cash rather than additional working-capital requirements.