Q4 Results: Kaynes Technology Rebounds After Near 20% Crash as Investors Hunt Bargains Following Broker Downgrades 

Mumbai, May 15: Shares of Kaynes Technology India rebounded on Friday after suffering a steep selloff in the previous session, as investors stepped in to buy the dip following a near-20% plunge triggered by disappointing quarterly earnings and a series of brokerage downgrades. 

The stock had tumbled on Thursday after the electronics manufacturing services (EMS) company reported weaker-than-expected March quarter results, missed its own revenue forecast and saw pressure on working capital and cash flows. The sharp correction pushed the stock to one of its steepest single-day declines since listing.  

Friday saw a tepid recovery, with the stock rebounding as much as 2.8% with sentiment remaining cautious after multiple brokerages cut ratings and target prices, citing concerns over execution, margin pressure and elevated working capital intensity. 

At the time of writing, the stock was trading 0.58% higher at Rs 3,356. 

The stock came close to the flatline after rebounding from yesterday’s fall. Source: NSE 

 What Triggered the Selloff? 

Kaynes reported a 21.5% year-on-year decline in consolidated net profit for the March quarter at around Rs 91 crore, even as revenue from operations rose 26% to nearly Rs 1,243 crore. EBITDA margins contracted to 15.6%.  

Brokerages said the bigger disappointment came from the company missing its own revenue guidance. Kaynes missed its quarterly revenue guidance by roughly 27% and also fell short of Street expectations.  

The brokerage JPMorgan downgraded the stock to “Neutral” from “Overweight” and slashed its target price to Rs 4,000 from Rs 6,000 earlier. It also cut earnings estimates for the next two financial years by 12-17%.  

Domestic brokerage Nuvama also turned cautious, reducing its earnings estimates and cutting the target price sharply after highlighting concerns over deteriorating balance sheet metrics and negative operating cash flow.  

Working Capital Worries Persist 

One of the key concerns flagged by analysts was the sharp rise in working capital days, which climbed to around 125 days against the company’s earlier guidance of 85 days. Analysts said this reflected slower cash conversion and increased stress on the balance sheet at a time when the company is aggressively expanding into new segments such as semiconductor packaging and printed circuit boards.  

Several brokerages also pointed to continued cash burn and rising debt levels as near-term risks, even though they acknowledged the company’s long-term growth opportunity in India’s expanding electronics manufacturing ecosystem. 

Why the Stock Is Recovering 

Friday’s rebound appears to be driven partly by bargain buying after the sharp correction, with some investors viewing the fall as excessive given the company’s strong order book and long-term growth prospects. 

Kaynes said its order book remained above Rs 8,000 crore at the end of FY26, providing healthy revenue visibility for the coming quarters. Management also maintained that demand across sectors such as automotive, industrial, aerospace, railways and defence electronics remained robust.  

Even so, analysts believe the stock could remain volatile in the near term until the company demonstrates better execution, improved cash flows and closer alignment between guidance and actual performance. 

Source:

• https://www.nseindia.com/get-quote/equity/KAYNES/Kaynes-Technology-India-Limited