Kaynes Technology’s shares erased early gains on Monday after a strong opening rally, reflecting continued volatility in the stock.
The scrip soared nearly 3 per cent on the NSE to an intraday high of ₹4,389.50 after opening at ₹4,305, compared with the previous close of ₹4,265.50. However, selling pressure emerged as the session progressed, and the stock slipped to ₹4,224 by 2.35 pm.
The intraday reversal comes amid heightened investor sensitivity around the stock following a sharp correction in recent months.
Kaynes Technology , which led to a steep despite the company maintaining its growth guidance.
Elara Capital retains buy despite governance concerns
In a recent report, Elara Capital said the market reaction to the accounting- and disclosure-related issues appeared disproportionate to their actual impact on the company’s fundamentals. The brokerage noted that while rigorous disclosure standards are critical, the inconsistencies flagged do not materially alter Kaynes’ revenue growth or margin trajectory.
Elara Capital highlighted that Kaynes’ stock has corrected significantly over the past three months, even though its core growth drivers remain intact. The brokerage expects strong earnings momentum, projecting a revenue and profit after tax compound annual growth rate of about 47 per cent and 49 per cent, respectively, over the medium term, supported by a robust order book and expanding presence across electronics manufacturing services segments.
Goodwill, orderflows
The differences in goodwill recognition stem from differing opinions on the valuation of intangible assets and can be argued both for and against. The key question is whether a sum of about ₹51 crore has a material impact on the company’s financials and justifies a correction of nearly ₹15,300 crore in the firm’s market value. We believe it does not, Elara stressed.
The report also pointed out that Kaynes continues to see healthy order inflows, with the consolidated order book showing strong year-on-year growth.
According to Elara, there is no meaningful impact on the company’s long-term growth outlook, and the second half of the financial year is expected to contribute a larger share of revenues, in line with historical trends.
“We expect Iskraemeco revenue to sustain at current levels in the upcoming years with the non-smart meter revenue outgrowing the smart meter revenue,” it added.
While acknowledging investor concerns around working capital and cash flow, Elara Capital said management has guided for improvements, with expectations of turning operating cash flow positive by the fourth quarter of FY26. The brokerage believes resolution of these issues could act as a catalyst for a re-rating of the stock.
Elara Capital has retained its ‘buy’ rating on Kaynes Technology, albeit with a lower target price of ₹5,365 (from ₹7,670), reflecting moderation in sector valuation multiples. At current levels, the brokerage said the stock trades at a discount to the broader EMS industry, making it one of the more attractive plays in the space despite near-term volatility.