Highness Microelectronics Ltd: a SMILE-type opportunity in electronics manufacturing?

[enelay]

Company: Highness Microelectronics
Sector: Electronics system design and manufacturing (ESDM)
Exchange: BSE SME
Basic Details
• Market Cap: 85 crores
• Issue Price: ₹114 - ₹120
• Current Price: ₹165
• Listing Date: April 2026

I found Highness while looking for smaller beneficiaries of India’s electronics localisation push. It resembles the SMILE framework by Vijay Kedia. -

• Small in size: Below 100 cr market cap, 16.1 crore FY26 revenue.

• Medium in experience: Incorporated in 2007, it is led by Gaurav Kejriwal, who has over two decades of display-industry experience. It listed only 2 months ago.

• Large in aspiration: Management has set a clear goal of doubling revenue in FY27, cross Rs 50 crore in FY28 and reach three-digit revenue in roughly four years. It is investing in glass cutting and COG/FOG to move upstream.

• Extra-large market potential: Their displays are used across railways, defence, aerospace, medical equipment and industrial automation, while policy support is moving from electronics assembly toward components and sub-assemblies.

What does Highness do?

Highness designs, integrates and manufactures TFT/LCD modules, controllers, touch screens and specialised display systems. It makes normal displays work inside locomotives, aircraft, ticketing machines or surgical systems through a high degree of customization and value addition (e.g. adding high-brightness backlights, wide-temperature capability, EMI shielding, night-vision compatibility, optical bonding, enclosures etc)

FY26 revenue mix:

Segment	Revenue	Mix
Defence and aerospace	Rs 6.38 crore	40%
Railways and metro	Rs 4.36 crore	27%
Medical	Rs 4.30 crore	27%
Industrial automation	Rs 1.07 crore	7%

Why can the business become much larger?

1. Tiny base and visible orders: The December 2025 order book in the RHP was about Rs 10 cr, including Rs 5.3 cr of dynamic route maps for 20 trainsets and Rs 2.7 cr of railway display modules/cables. Management says Rs 8.5-9 crore of POs are under execution and customers have provided Rs 30 crore of 18-month projections.

2. Exports: Exports rose from Rs 0.12 crore in FY24 to Rs 4.3 cr in FY25 and Rs 7.1 cr in FY26. Mgmt says three Australian railway/aerospace design wins have generated over Rs 5-6 cr, with three more railway design wins under development

3. Backward integration: Highness currently imports open cells and performs downstream integration. IPO proceeds include Rs 5.27 crore for a COG/FOG line, which can attach driver ICs and flexible circuits directly to display glass. Management expects this to reduce input costs by 8-10% initially and increase local value addition

4. Policy tailwinds: Highness has received a 5,000 sq m plot in Goa’s Tuem Electronics Manufacturing Cluster and says it is applying for government subisidies under ECMS Segment D. The proposed facility covers display modules, touch screens, controllers, glass cutting, COG/FOG, testing and R&D. ECMS approval is still pending.

5. Scaling infra is forming: . Recent LinkedIn hiring includes railways, metros, airports, aviation electronics and separate regional medical-sales teams. Their Linkedin also showed CEO Gaurav Kejriwal presenting Highness at SID Display Week 2026 in Los Angeles. Highness has separately signed a strategic-alliance MoU with Axiom Manufacturing, USA, to access customers across the Americas using Axioms US manufacturing base. The company is also doing quarterly investor calls from the outset. These are useful soft signs that management is building ahead of the current size.

Promoter background

Highness is essentially a family-run business- MD Gaurav Kejriwal has been with the company since incorporation in 2007. His father Manjul is a co-promoter/non-executive director, while wife Shruti joined the board in 2024 and handles HR and marketing. Promoter and promoter group own ~65% post IPO, and the RHP discloses no criminal/ regulatory action, wilful-default clasification or material promoter litigation.However, listed track record is only 2 months and the business remains dependent on Gaurav, so trust will have to be earned through minority shareholder treatment.

Financials and FY27 valuation

Rs crore	FY24	FY25	FY26
Revenue	10.70	14.07	16.12
EBITDA	5.97	4.52	6.62
PAT	2.39	2.46	4.10
PAT margin	22.3%	17.5%	25.5%

FY27 guidance is Rs 30-32 crore revenue, around 35% EBITDA margin and more than 25% PAT margin. If achieved revenue grows ~ 100% over FY26. At current market cap of roughly Rs 85 crore, the stock trades at around 10x FY27 earnings.

FY28 guidance is above Rs 50 crore revenue and they have a medium term target of 3 digit revenue (6x from current base).

Diversification optionality

Early signs point towards the Highness expanding their TAM beyond displays, but it is very early-stage optionality

• In March 2025, BITS Pilani transferred patented copper-carbon-nanotube nanocomposite technology to Highness. BITS says the collaboration covers digital imaging, automotive and semiconductors, and describes Highness as “investing in India’s semiconductor ecosystem.”

1. 

• Highness established a research centre in 2025 with Manipal University for ultra-conductive copper and aluminium materials, calling it part of its diversification
• In Feb 2025, it expanded its objects clause to cover embedded boards, motherboards, controller boards, single-board computers and materials-science research, beyond conventional displays
• Signed MoU with Axiom Manufacturing USA in May 2026 adding PCB-design expertise and access to defence, aerospace and SATCOM.

Key Risks?

• Still a very small company with limited corporate governance history

• Imports were 93% of purchases in 9M FY26. The largest supplier contributed 72.7% - mgmt clarified in the concall that this is a Hong Kong based aggregator who they use to source from multiple companies

• Largest customer contributed 45% of revenue, top ten contributed 82.4%

• Rs 3.68 crore receivable overdue from aircraft customer Aerohaste at December 2025. Management says they have comfort since this is a repeat customer and expects full collection by Sept 2026

• FY26 receivables were Rs 10.4 cr and inventory Rs 8.4 cr, indicating longer working capital cycles that are quite typical at this scale

• SME liquidity can make exits difficult

Would invite members who are familiar with the company / sector to add on to the understanding

Disclosure and Disclaimer
I am invested in the stock.

SME stocks carry higher risks due to their smaller size, limited operating history, and relaxed regulatory requirements. This analysis is for educational purposes only and should not be considered as investment advice. Always conduct your own research or consult with sebi registered financial advisors before making investment decisions.

[sameernics]

The current capacity utilizations seems to be very low, so I do not understand why do they need a capacity expansion ? Am I missing something here?

[ca.namish]

as replied by management in concall

[sameernics]

Thanks. Any timeline given by the management for the automation to kick in?

[bibhor]

Management has indicated about 1.5 years for Phase-1 of Goa plant to go live . Very early stage .

They have indicated that around 20 cr of capex would be required for both phases of Goa plant , Does anyone knows how do they plan to fund this capex ?

[enelay]

“Centre’s Big Push To Manufacturing: Customs Duty Cut On Electronics Parts - Among the biggest beneficiaries are manufacturers of display assemblies used in automotive, medical and industrial equipment” - Source - https://www.ndtv.com/business-news/centres-big-push-manufacturing-customs-duty-cut-electronics-parts-make-in-india-11746965

This should be a big boost for Highness as the import 90% of their purchases and do value addition in India

From RHP -

Disc - Invested

[BuyHighSellLow]

The story looks fine to me. But there are two big questions.

1. Given the company’s presence in custom engineered and rugged display systems for industrial, medical, railway and defence applications, what is the strategic rationale for entering passenger automotive displays, which appears to be more competitive, price-sensitive, lower margin carrying (at least initially when they target Tier 2 and Tier 3 OEMs)? It would be helpful to understand the opportunity management sees in this segment, the intended customer profile, the expected qualification timeline and how this expansion fits alongside the company’s existing verticals.
2. It was stated in the investor conference call that there is currently no other player in India undertaking the kind of display manufacturing, assembly and integration carried out by Highness. Publicly available information suggests that companies such as Keetronics, Samtel, SFO Technologies and Visteon undertake varying degrees of custom display engineering, ruggedisation, optical bonding and system integration in India. Each company does not overlap in all of the 4 industries that Highness delivers to (Railways, healthcare, aerospace & defence, industrial) but I see overlap in at least 2 industries per peer. This is not about the vertical integration, but about the end-product, custom-engineering and customer profile.

(I know Mr. Kejriwal said and I quote “even in the kind of manufacturing and assembly and integration we are doing, there is no player at the moment”. If you look at the assembly and integration that Highness does, that is being done by at least 2 other players including Samtel. However, if you talk about manufacturing the open cells and other components, that is not being done by anyone at the moment including Highness itself)

If someone can answer this then that would lead to a lot more clarity.

Disc.: Not invested, not an investment advice

[BuyHighSellLow]

The CFO has responded to my questions, but the answers are rather vague for the most part.

1. I see that the director remuneration in FY25 and 9M FY26 stand at approx. 18% of the PAT. I just want to make sure that there was a board approval for that. Kindly share that reference with me.

Yes, the director remuneration was approved through the appropriate corporate governance process and is within the framework of the Companies Act, the Company’s remuneration policy and applicable approvals

2. What amount remains receivable from Aerohaste? How much has been collected since March 2026, and have all FEMA-related collection requirements been complied with?

We are receiving aerohoste amt in tranches. We are complied with FEMA regulations.

3. Has Global Business been fully closed? Are there no continuing GST registration, bank account, customers or transactions with Highness?

Global business is fully closed.

4. Can you provide the value and ageing of FY26 closing inventory, identifying finished goods, work-in-progress, customer-specific stock and slow-moving items. How much is backed by non-cancellable purchase orders?

FY26 closing inventory has increased over FY25, largely on account of finished goods pending dispatch. Most of backed by non-cancellable PO

5. Has the Goa lease deed been executed, and has ECMS approval actually been received?

Goa lease deed already executed. Ground breaking ceremony is also done. ECMS approval is still pending.

6. Before we materially enter into the auto segment, are you trying to increase your revenue visibility and stickiness? The reason I ask this is because the top customer contributed about 45% of 9MFY26 revenue and order completion time is small.

We are working towards building a broader base of customers across Defence & Aerospace, Railways, Medical, Industrial Electronics and Automotive. The automotive opportunity is particularly relevant because successful qualification can potentially lead to repeat programs and longer-duration relationships, thereby improving revenue visibility and customer stickiness

[enelay]

Highness is exhibiting at SEMICON India. From their LinkedIn page:

We’re exhibiting at SEMICON India 2026, 17–19 September, New Delhi.

This year, we’re not bringing a product catalogue. We’re bringing the manufacturing depth behind it: three new capabilities: our glass cutting line, and Chip on Glass and Film on Glass bonding, all in-house for the first time.

If you’re in display manufacturing, systems integration, or procurement for railways, medical, defence, or industrial infrastructure, this is worth stopping by for.

Proud to be part of an event bringing together India’s semiconductor ecosystem, organised by India Semiconductor Mission, Ministry of Electronics and Information Technology, and SEMI.