At a Glance
Kaycee Industries just flipped its Q1 FY26 switch with ₹13.9 Cr revenue and ₹1.4 Cr PAT, a slight dip compared to the previous quarter but still keeping margins decent at 14.6%. The stock trades at ₹1,250 with a nosebleed P/E of 67.5, pricing in perfection. The company announced a new Whole-Time Director and Chairman, signaling a leadership refresh. But with the stock at 14x its book value, investors better wear shock-proof gloves.
Introduction
Founded in 1942, Kaycee Industries is old enough to have witnessed India’s independence and still keeps buzzing—literally—with its electrical switches and components. Now a subsidiary of Salzer Electronics, Kaycee serves sectors like power, telecom, and renewables. Despite being a niche player, it has delivered a stellar 31% profit CAGR over five years, making it a multibagger darling.
But as of FY26, the stock is priced like it’s already conquered the electrical world. Is the valuation justified or is this the market’s idea of “surge pricing”?
Business Model (WTF Do They Even Do?)
Kaycee manufactures:
- Industrial Switches: Rotary, cam-operated, load-break types.
- Mechanical Counters: For machines that still count old-school.
- Electrical Components: Supporting panel builders, power plants, telecom, and renewable installations.
Revenue comes primarily from industrial clients across multiple sectors, ensuring diversification. The association with Salzer Electronics adds R&D and distribution muscle, giving Kaycee a competitive edge.
Financials Overview
Q1 FY26 Performance:
- Revenue: ₹13.9 Cr (↓10% QoQ)
- EBITDA: ₹2.03 Cr (14.6% margin)
- PAT: ₹1.4 Cr (↓25% QoQ)
- EPS: ₹4.41
FY25 Recap:
- Revenue: ₹53.2 Cr
- PAT: ₹5.88 Cr
- Margins: OPM 16.2%, PAT 11%
Commentary: Margins remain healthy, but revenue growth is tepid this quarter. The high P/E is betting on strong future expansion.
Valuation
CMP ₹1,250 | Market Cap ₹397 Cr
Fair Value Calculation
- P/E Method:
FY25 EPS ₹18.5 × industry P/E 30 → ₹550 (stock trading at 2× fair value). - EV/EBITDA:
EV ₹397 Cr / EBITDA ₹8.5 Cr → 46x, expensive. - DCF:
Assuming 15% growth, WACC 9% → DCF fair value ₹600–₹700.
Fair Value Range: ₹600 – ₹700 (CMP is way above fundamentals).
What’s Cooking – News, Triggers, Drama
- New Chairman & Whole-Time Director appointed in Q1 FY26.
- Leadership change may bring fresh strategy or could be just ceremonial.
- Salzer Electronics backing continues to provide synergies.
- Risks? Any slowdown in industrial capex can dim revenue.
Balance Sheet
| Particulars (₹ Cr) | Mar 23 | Mar 24 | Mar 25 |
|---|---|---|---|
| Assets | 29.1 | 34.7 | 40.7 |
| Liabilities | 29.1 | 34.7 | 40.7 |
| Net Worth | 19.8 | 23.8 | 29.0 |
| Borrowings | 4.6 | 4.1 | 3.6 |
Remark: Minimal debt, clean balance sheet, strong asset turnover.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating CF | 1.76 | 6.17 | 5.86 |
| Investing CF | -5.34 | -4.27 | -4.40 |
| Financing CF | 4.20 | -1.24 | -1.50 |
Comment: Strong operating cash, consistent reinvestment, conservative financing.
Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 17% | 21% | 22% |
| ROCE | 23.6% | 24.3% | 27.2% |
| P/E | 67x | 70x | 67.5x |
| PAT Margin | 8.4% | 9.2% | 10.6% |
| D/E | 0.2 | 0.1 | 0.1 |
Remark: Operationally sexy, valuation stressy.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 41.5 | 48.5 | 53.2 |
| EBITDA | 4.7 | 6.8 | 8.6 |
| PAT | 3.5 | 4.5 | 5.9 |
Remark: Consistent growth; margins expanding steadily.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Apar Inds. | 19,675 | 882 | 40 |
| Genus Power | 2,442 | 293 | 38 |
| Shilchar Tech. | 623 | 147 | 41 |
| Kaycee Inds. | 54 | 5.8 | 67 |
Remark: Kaycee trades at a P/E higher than peers despite being a much smaller player.
Miscellaneous – Shareholding, Promoters
- Promoters: 71.9%
- DIIs: 0.02%
- Public: 28.07%
Promoter Bio: Salzer Electronics’ backing adds credibility but also limits free float.
EduInvesting Verdict™
Kaycee Industries is a niche electrical components player with solid fundamentals, high margins, and an enviable ROCE. However, the valuation is priced for perfection, leaving little room for error.
SWOT
- Strengths: Strong brand in industrial switches, zero debt, high ROCE.
- Weaknesses: Small size, limited market visibility.
- Opportunities: Expansion under Salzer, industrial demand growth.
- Threats: Valuation bubble, competition, raw material costs.
Conclusion:
Kaycee is a fundamentally sound company but currently trading like it’s the next Tesla of switches. Investors need to decide whether they’re comfortable paying luxury hotel prices for a factory outlet stock.
Written by EduInvesting Team | 01 August 2025
SEO Tags: Kaycee Industries, Q1 FY26 Results, Electrical Components, Salzer Electronics Analysis
