Kaynes Technology India shares declined as much as 4.27% on Monday to hit an intraday low of ₹3,132, marking the third consecutive session of losses and taking the stock's three-day decline to nearly 25%. According to reports from The Economic Times, brokerage firm Elara Securities downgraded its rating on the company to 'Accumulate' from 'Buy' following the weaker-than-expected Q4 performance. The stock's technical indicators show bearish momentum, trading below all 8 out of 8 simple moving averages with a 14-day RSI of 31.9, indicating oversold conditions. As per Trendlyne data, the stock's 14-day RSI stands at 31.9—where a reading below 30 is considered oversold and above 70 indicates overbought conditions.
The company reported a consolidated net profit of ₹91 crore for the March quarter, down 22% year-on-year from ₹116 crore in the corresponding period last year. However, revenue from operations rose 26% YoY to ₹1,243 crore compared with ₹984 crore a year earlier, as reported by The Economic Times. The mixed financial performance contributed to investor concerns about the company's operational efficiency and profitability trajectory.
According to Elara Securities, Kaynes Technology India missed its revised FY26 guidance on three key parameters. Revenue came in at ₹36 billion against the revised guidance of ₹40 billion, while operating cash flow (OCF) remained negative at ₹6 billion despite expectations of turning positive. Net working capital (NWC) days stayed elevated at 125 days, missing the company's sub-100-day target. For FY27, management has guided for 30% growth, lower than its earlier target of 40–50%, though still ahead of the broader EMS industry growth rate. Elara noted that the company's expectations of improving OCF and reducing working capital in FY27 could remain challenging.
Elara Securities cut its target price on the stock to ₹3,530 from ₹5,700, valuing the company at 36x March FY28 estimated earnings, versus 42x earlier. The brokerage reduced FY27E and FY28E EPS estimates by 23% and 33% respectively, citing lower Q4 sales, weaker guidance visibility, and persistent concerns around cash flow and working capital. Despite the downgrade, Elara believes the recent weakness was likely due to deferred execution rather than order cancellations, and expects the upcoming OSAT plant to contribute meaningfully to revenue from FY27 onward. The brokerage expects earnings CAGR of 40% during FY26–29E, with average RoE and RoCE estimated at 11% and 10% respectively during FY27E–29E.
According to Elara Securities, improvement in working capital management and operating cash flow would remain key triggers for any potential rerating in the stock, while margins continue to remain among the highest in the industry. The brokerage highlighted that the upcoming OSAT plant is expected to contribute meaningfully to revenue from FY27 onward, though expectations of improving OCF and reducing working capital in FY27 could remain challenging. Elara noted that the stock's technical setup shows a bearish pattern, trading below all 8 out of 8 simple moving averages, with the 14-day RSI at 31.9 indicating oversold conditions.
