Kaynes, Dixon Tech share price target cut by up to 30% but JPMorgan stays bullish

Brokerage firm JPMorgan has cut its price target on shares of EMS players Dixon Technologies Ltd., and Kaynes Technology Ltd. but maintained its "overweight" rating on these names in their latest note on Thursday, January 8.

JPMorgan has cut its price target on Kaynes Tech by 20% to ₹6,100 from ₹7,550 earlier. The revised price target implies an upside potential of nearly 60% from current levels.

Dixon Tech's price target has also been cut by JPMorgan to ₹13,700 from ₹19,600 earlier, which is a 30% cut. The revised price target implies an upside potential of 15% from current levels.

For Dixon, JPMorgan expects the year-on-year revenue growth to be flat, given the high base of last year. This, along with the weakness in mobile volumes due to headwinds from memory price increase which has led to the mobile price increase and end-consumer demand getting hurt. The brokerage sees its margins going up by 20 basis points to 3.9%.

On the flip side, Kaynes Tech's revenue may go up by 30% during the quarter from last year, driven by the automotive and industrial verticals. However, delays in the Kavach program could prompt the company to cut its financial year 2026 revenue guidance to ₹4,000 crore from ₹4,400 crore earlier, JPMorgan stated. High margin smart meters could aid EBITDA margin improvement by 130 basis points from last year to 15.5%, the note stated.

Earlier in the week, both these EMS stocks had declined after Jefferies had also cut their price targets sharply, but maintained its bullish stance on them.

Shares of Dixon Technologies ended 0.5% higher on Wednesday at ₹11,780, while Kaynes Tech shares ended 1.1% higher at ₹3,834.

To be updated with more details.