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What is the story about?
Kaynes Technology Ltd., shares of which fell 20% on Thursday due to the fourth quarter earnings miss, could require further fund raising, as high working capital remains a balance sheet concern, according to a note from brokerage firm Jefferies on Friday, May 15.
The brokerage though, has maintained its "buy" rating on the stock, but cut its price target to ₹3,970 from ₹4,515 earlier. The revised price target implies an upside potential of 19% from current levels.
Kaynes Tech has received at least seven downgrades on Friday, from brokerage such as Avendus Spark, IIFL, JM Financial, Nomura, BNP Paribas, CLSA and Equirus Securities.
Jefferies highlighted that it has cut its financial year 2027-2028 Earnings Per Share (EPS) estimates by 16% to 17% to factor in the earnings miss and weak management commentary.
The management also did not provide any near-term outlook.
Yet, Jefferies sees Kaynes' EPS over financial year 2026-2029 to grow at a Compounded Amnual Growth Rate of 43% as OSAT and PCB sales can come onstream by this financial year.
Despite having raised over ₹3,000 crore across two institutional share sales (QIP), Kaynes could require more debt due to the working capital concerns, according to Jefferies, who also noted that it had already cut its target PE to 35 times, which is a steep discount to its historical trading average PE multiple of 65 times due to the persistently high working capital and weak execution.
The brokerage also said that it maintained its "buy" rating on the stock as the stock is down nearly 55% from its October 2025 peak and trades below historical averages.
Delay in OSAT and PCB production and customer on-boarding, order book slowdown are some key downside risks for the stock, Jefferies' note said.
Avendus Spark has downgraded the stock to "reduce" from "add" and cut its price target to ₹3,208 from ₹3,578 earlier.
IIFL Institutional Equities has downgraded the stock to "add" from "buy" and cut its price target to ₹3,835 from ₹5,015 earlier.
24 analysts have coverage on Kaynes Tech, of which eight have a "buy" rating, nine say "hold" and seven have a "sell" rating on the stock.
Shares of Kaynes Tech ended Thursday's trading session 20% lower and have now entered the F&O ban, meaning no new positions can be taken in the stock.
The brokerage though, has maintained its "buy" rating on the stock, but cut its price target to ₹3,970 from ₹4,515 earlier. The revised price target implies an upside potential of 19% from current levels.
Kaynes Tech has received at least seven downgrades on Friday, from brokerage such as Avendus Spark, IIFL, JM Financial, Nomura, BNP Paribas, CLSA and Equirus Securities.
Jefferies highlighted that it has cut its financial year 2027-2028 Earnings Per Share (EPS) estimates by 16% to 17% to factor in the earnings miss and weak management commentary.
The management also did not provide any near-term outlook.
Yet, Jefferies sees Kaynes' EPS over financial year 2026-2029 to grow at a Compounded Amnual Growth Rate of 43% as OSAT and PCB sales can come onstream by this financial year.
Despite having raised over ₹3,000 crore across two institutional share sales (QIP), Kaynes could require more debt due to the working capital concerns, according to Jefferies, who also noted that it had already cut its target PE to 35 times, which is a steep discount to its historical trading average PE multiple of 65 times due to the persistently high working capital and weak execution.
The brokerage also said that it maintained its "buy" rating on the stock as the stock is down nearly 55% from its October 2025 peak and trades below historical averages.
Delay in OSAT and PCB production and customer on-boarding, order book slowdown are some key downside risks for the stock, Jefferies' note said.
Other Downgrades
Avendus Spark has downgraded the stock to "reduce" from "add" and cut its price target to ₹3,208 from ₹3,578 earlier.
IIFL Institutional Equities has downgraded the stock to "add" from "buy" and cut its price target to ₹3,835 from ₹5,015 earlier.
Buy Or Sell?
24 analysts have coverage on Kaynes Tech, of which eight have a "buy" rating, nine say "hold" and seven have a "sell" rating on the stock.
Shares of Kaynes Tech ended Thursday's trading session 20% lower and have now entered the F&O ban, meaning no new positions can be taken in the stock.
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