Kernex Microsystems India Ltd. (KERNEX) AI Stock Analysis

• Market Cap: ₹19.96B
• Dividend Yield: N/A
• Average Volume (3M): 18.93K
• Price to Earnings (P/E): 37.0
• Beta (1Y): 1.06
• Revenue Growth: 155.87%
• EPS Growth: N/A
• Country: IN
• Employees: 228
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 3.92
• Shares Outstanding: 16,802,422
• 10 Day Avg. Volume: 35,381
• 30 Day Avg. Volume: 18,926
• PEG Ratio: -0.10
• Price to Book (P/B): 8.70
• Price to Sales (P/S): 7.24
• P/FCF Ratio: 131.86
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: ₹1,304.00 ▲(25.02% Upside)

The score is driven mainly by improved financial performance (profitability turnaround, stronger margins, solid balance sheet) and supportive technical strength (uptrend across key moving averages with positive MACD). These positives are tempered by valuation risk from a high P/E and the absence of dividend yield, plus historical volatility in revenue and cash flows.

Positive Factors

Profitability turnaround

Kernex's shift to a positive net income and notably higher gross margins reflects durable operational improvements and tighter cost control. Sustained profitability enhances internal funding for R&D, service capability and bid competitiveness, improving long-term resilience versus prior losses.

Robust balance sheet

A strong equity base and controlled leverage provide financial flexibility for multi-year infrastructure contracts and capex timing. Higher cash reserves reduce refinancing risk, support working capital during long project cycles, and allow strategic investments without immediate external funding.

Positive free cash flow

Conversion to positive free cash flow indicates improving cash generation from operations and better working capital management. Reliable FCF supports recurring service and maintenance revenue delivery, funds reinvestment in product development, and underpins sustainable growth initiatives.

Negative Factors

Volatile revenue history

Past swings in revenue weaken predictability of margins and cash generation over multi-quarter horizons. For a project-driven rail-systems firm, uneven revenue complicates capacity planning, supplier commitments and hiring, increasing the risk that current profitability may fluctuate with contract timing.

Cash-flow inconsistency risk

Although FCF is now positive, historical negative cash flow periods imply exposure to payment timing, large project milestones and working-capital swings. Persistent inconsistency would constrain reinvestment, extend receivable financing needs, and heighten sensitivity to contract execution delays.

Industry concentration (rail-focused)

A concentrated product portfolio tied to rail signaling and safety creates exposure to infrastructure spending cycles, procurement timelines and regulator-driven project schedules. Limited diversification raises sales volatility risk and ties growth prospects to rail sector capex trends.

Kernex Microsystems India Ltd. Business Overview & Revenue Model

Company Description

Kernex Microsystems (India) Limited, together with its subsidiaries, engages in conceptualizing, designing, developing, manufacturing, installing, and maintaining of level crossing protection systems and anti-collision systems for the railroad sector. The company offers LxGuard, a level crossing protection system; TrainSHIELD, a train collision avoidance system; SAFELx, a train actuated warning device; SENTINEX, a level crossing warning system; and CASRY, a collision avoidance system for yards and terminals. It also provides ACD, an anti-collision device; ATRW, an automatic timing (recording) device for railway wagons; KTPIS, a train passenger information system; and BCPS2440, a battery charger and power supply product. In addition, the company provides product development, electronic product design, embedded software design, electronic manufacturing, ESS testing, offshore development, quality control, and training services. Kernex Microsystems (India) Limited was incorporated in 1991 and is headquartered in Hyderabad, India.

How the Company Makes Money

Kernex Microsystems generates revenue through multiple streams, primarily from the sale of its railway signaling systems, train control solutions, and related software services. The company engages in contracts with government and private entities involved in rail infrastructure development, providing them with essential technology that enhances operational safety and efficiency. Additionally, KERNEX benefits from long-term service agreements and maintenance contracts, which provide ongoing revenue. The company has established significant partnerships with various railway authorities and organizations, which further bolster its market presence and contribute to its earnings. Their focus on innovation and the ability to adapt to evolving technology trends also play a crucial role in securing new contracts and maintaining existing ones.

Kernex Microsystems India Ltd. Financial Statement Overview

Summary

Improving fundamentals with a strong profitability turnaround (positive net income) and better margins, supported by a solid equity base and manageable leverage. Offsetting factors are historically volatile revenue growth and past cash-flow inconsistency despite the recent move to positive free cash flow.

Income Statement

Kernex Microsystems India Ltd. has shown a remarkable turnaround in its income statement metrics. The most recent year recorded a significant increase in total revenue to 1,897.7 million with a positive net income of 502.4 million, indicating improved profitability. The gross profit margin improved considerably, reflecting better cost management and operational efficiency. However, the company experienced volatile revenue growth over the past few years, which could pose a risk to consistent financial performance.

Balance Sheet

The balance sheet of Kernex Microsystems India Ltd. presents a robust equity position with stockholders' equity at 1,579.1 million, contributing to a favorable equity ratio. The Debt-to-Equity ratio remains manageable, suggesting controlled leverage. The substantial increase in total assets and cash reserves strengthens the company's financial stability. Despite improvements, there remains a potential risk from liabilities, which have increased over the years.

Cash Flow

The cash flow analysis shows a significant improvement in free cash flow, turning positive to 104.1 million, indicating better cash management and operational efficiency. The operating cash flow to net income ratio points towards improved cash conversion from earnings. However, past periods of negative free cash flow highlight potential cash flow volatility, and the company must ensure sustained positive cash flow to support future growth.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.17B	1.90B	195.98M	40.40M	66.52M	183.23M
Gross Profit	816.29M	749.32M	-13.45M	12.18M	30.17M	142.12M
EBITDA	492.61M	422.53M	-197.83M	-160.34M	-121.29M	50.86M
Net Income	540.82M	502.37M	-264.12M	-198.15M	-171.99M	20.17M
Balance Sheet
Total Assets	0.00	2.36B	1.59B	1.02B	775.31M	922.98M
Cash, Cash Equivalents and Short-Term Investments	343.27M	150.21M	39.08M	152.94M	67.64M	51.57M
Total Debt	0.00	403.23M	279.92M	107.02M	180.54M	202.46M
Total Liabilities	-1.57B	791.41M	525.17M	196.12M	292.07M	295.42M
Stockholders Equity	1.57B	1.58B	1.07B	821.51M	482.33M	626.52M
Cash Flow
Free Cash Flow	0.00	104.14M	-764.44M	-280.78M	-47.71M	25.80M
Operating Cash Flow	0.00	145.46M	-716.30M	-273.87M	-46.14M	32.75M
Investing Cash Flow	0.00	-88.44M	-45.92M	-6.27M	62.92M	9.83M
Financing Cash Flow	0.00	54.12M	648.37M	451.46M	326.00K	-14.56M

Kernex Microsystems India Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1043.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:KERNEX, the sentiment is Neutral. The current price of 1043 is below the 20-day moving average (MA) of 1213.36, below the 50-day MA of 1170.26, and below the 200-day MA of 1125.06, indicating a neutral trend. The MACD of 2.45 indicates Positive momentum. The RSI at 48.28 is Neutral, neither overbought nor oversold. The STOCH value of 43.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IN:KERNEX.

Kernex Microsystems India Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SAKSOFT	72 Outperform	₹22.66B	16.99	―	0.42%	21.17%	27.66%
KERNEX	66 Neutral	₹19.96B	37.00	―	―	155.87%	―
SASKEN	64 Neutral	₹19.11B	49.37	―	1.83%	77.13%	-39.91%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
IKIO	54 Neutral	₹11.99B	57.44	―	0.55%	11.73%	-64.05%
NELCO	53 Neutral	₹15.04B	-811.06	―	0.13%	-7.50%	-79.50%
RAMCOSYS	52 Neutral	₹21.18B	95.68	―	―	20.41%	―

Kernex Microsystems India Ltd. Corporate Events

Kernex Microsystems Confirms SEBI Demat Compliance for December 2025 Quarter

Kernex Microsystems (India) Ltd. has notified the stock exchanges that it has received a confirmation certificate from its registrar and transfer agent, KFin Technologies Ltd., for the quarter ended 31 December 2025, certifying compliance with Regulation 74(5) of the SEBI (Depositories and Participants) Regulations, 2018. The filing confirms that details of securities dematerialised and rematerialised during the quarter have been duly furnished to all stock exchanges where the company’s shares are listed, underscoring Kernex’s adherence to regulatory requirements and supporting transparency and confidence for investors and other market participants.

Kernex Wins Rs 2,465 Crore Kavach Contract from Chittaranjan Locomotive Works

Kernex Microsystems (India) Limited has secured a major domestic contract from Chittaranjan Locomotive Works worth Rs 2,465.71 crore for the supply, installation, testing and commissioning of 3,024 sets of on-board Kavach loco equipment, compliant with the latest Railway Design and Standards Organisation specifications. The 12‑month execution contract significantly boosts the company’s revenue visibility and strengthens its competitive position in India’s rapidly expanding railway safety infrastructure segment, underscoring its role as a key beneficiary of ongoing investments in train protection and signaling upgrades by Indian Railways.

Kernex Says Lapsed CLW KAVACH Order Will Not Hit Financials, Eyes New Rail Tenders

Kernex Microsystems (India) Ltd. has disclosed that it was unable to complete a 2024 order from Chittaranjan Locomotive Works (CLW) for supply, installation, testing and commissioning of on-board KAVACH equipment for 2,500 locomotives within the stipulated timeline due to delays in the certification process, and CLW has declined the company’s request to extend the delivery period. The company said this development will not affect its financial position, technical credentials or eligibility for current and future Indian Railways tenders, and it plans to redeploy the existing inventory from this project towards newly floated locomotive tenders by CLW and Banaras Locomotive Works, as well as other ongoing and upcoming railway projects, with tender results expected shortly.

Kernex Microsystems Closes Trading Window Ahead of Q3 FY2025 Results

Kernex Microsystems (India) Limited has announced the closure of its trading window for company securities for all designated and connected persons and their immediate relatives, in line with its Code of Conduct and the SEBI (Prohibition of Insider Trading) Regulations, 2015. The window will remain closed from 1 January 2026 until 48 hours after the declaration of the unaudited financial results for the third quarter ended 31 December 2025, a routine governance step aimed at preventing insider trading and reinforcing regulatory compliance and transparency for investors and other stakeholders.