Kaynes Technology crashes 13%, hits eight-month low; brokerages cautious

kaynes Technology India share price today

 

Kaynes Technology India shares hit an eight-month low of ₹4,343, plunging 12.7 per cent on the BSE in Friday's intraday trade, amid heavy volumes. The sharp decline in the stock price of the electronics manufacturing services (EMS) company came after brokerage firm Kotak Institutional Equities, raised concerns related to its accounting disclosures and high working capital days.

 

The stock price of the industrial products company is quoting at its lowest level since April 2025. In the past one month, Kaynes Tech stock has tanked 31 per cent as compared to 2.3 per cent rise in the BSE Sensex. Moreover, it has plunged 41 per cent from its three-month high level of ₹7,705, which it touched on October 7, 2025.

 

The stock had hit a 52-week high of ₹7,824.95 on January 1, 2025 and a 52-week low of ₹3,835 on February 11, 2025.

 

At 3:05 PM, Kaynes Technology shares were quoting 11.13 per cent lower at ₹4424.30 as against 0.48 per cent rise in the BSE Sensex. Average trading volume on the counter more than doubled, with a combined 7.9 million equity shares having changed hands on the NSE and BSE, till the time of writing this report.

 

Why is Kaynes Technology stock price under pressure?

 

Kaynes Technology is a leading end-to-end and IoT solutions-enabled integrated electronics manufacturer in India, having capabilities across the entire spectrum of Electronics System and Design Manufacturing (ESDM) services.

 

According to Kotak Institutional Equities, Kaynes acquired Iskraemeco and Sensonic (54 per cent stake) in FY25 for a consideration of ₹88.3 crore, recognizing a goodwill of ₹114 crore.However, the company's FY25 consolidated balance sheet does not show a corresponding increase in goodwill.

 

Instead, it reflects a net negative adjustment of ₹1 crore, net of capital reserve, alongside a ₹56.1 crore rise in general reserves. The management clarified that since a major part of the consideration is for a contract that Iskraemeco has entered into, it was recognised as an intangible asset.

 

"We note that a) no additions in intangible assets due to contract/customer relationship-related assets was recorded; and b) no corresponding fair value adjustments were disclosed on acquisitions. Further, the payment for these acquisitions of ₹72.5 crore (₹88.3 crore ;ess contingent consideration of ₹15.8 crore) is not shown as cash outflow,"Kotak pointed out.

 

On its part, the management stated that investments in subsidiaries are eliminated during consolidation, so these payments were not shown in the consolidated cash flow statement.

 

Separately, Kotak Institutional Equities bserved inconsistencies in the disclosures made by the standalone entity and various subsidiaries on inter-company related transactions for the year and in year-end balances.

 

Iskraemeco's related-party disclosures, it said, show 1) purchases of ₹180 crore from Kaynes Electronics Manufacturing in FY2025, which are not reflected in Kaynes Electronics Manufacturing's related-party disclosures; and 2) year-end payables of ₹320 crore to Kaynes Technology and ₹180 crore to Kaynes Electronics Manufacturing and receivables of ₹190 crore from Kaynes Technology. These, too, are not reflected in the related-party disclosures of Kaynes Technology and Kaynes Electronics Manufacturing

 

In addition, Iskraemeco's related-party disclosures show almost all current receivables due from the parent, with ₹45.8 crore of the total receivables being outstanding for over a year, Kotak said.

 

The report by Kotak Institutional Equities on Kaynes Tech also noted that contingent liabilities increased to ₹520 crore in FY25 -- 18 per cent of net worth (FY24: ₹270 crore,11 per cent of net worth). This is primarily due to an increase in bank and corporate guarantees and continuing receivable discounting arrangements.

 

On its part, the management issued a clarification on the report and said the company would like to emphasize that it respects all forms of independent market analysis and research. "Such external perspectives help deepen understanding, broaden dialogue, and play an important role in shaping informed investor decisions".

 

On Contingent Liabilities increasing to ₹520 crore (18 per cent of the net worth), Kaynes Technology clarified that there were major additions during the year, including Performance Bank Guarantee for Iskraemeco Projects (₹96.8 crore) and corporate guarantee issued to subsidiary companies (₹132.5 crore; Kaynes Electronics ₹122.5 crore + Iskraemeco ₹70 crore).

 

These were necessitated due to funding requirements at Iskraemeco subsequent to the acquisition, the company said. CLICK HERE FOR MORE DETAILS

 

Investec maintains 'Sell' on Kaynes Technologies

Global brokerage Investec, too, said the company's Annual Report for FY25 and H1FY26 results highlight three concerning trends: a) weak performance of the core business, with growth led by Iskraemeco (acquired smart meter business); b) higher working capital troubles; and c) limited investments so far in OSAT/ PCB.

 

"Past three quarters' results raise multiple concerns: a) Debtors rose from ₹570 crore at the end of FY25 to ₹1120 crore at the end of H1FY26, despite quarterly revenue run-rate remaining broadly the same between Q4FY25 and Q2FY26; b) Kaynes created a provision for doubtful debt of ₹55 crore in H1, 10 per cent of outstanding debtors at the end of FY25; and c) these debtors do not include deferred receivables of Iskraemeco (₹230 crore now vs more than ₹300 crore originally), which the company is looking to discount (>₹100 crore receivables were already discounted at FY25-end)," it said.

 

In view of the weak performance of the base EMS business and deteriorating balance sheet, the brokerage values Kaynes' core FY27 PE of 55x rich. It maintained its 'SELL' rating on the stock with a share price target of ₹5,760.  Those at JPMorgan, too, cautioned investors against 'bottom fishing' at current levels.  "Unresolved issues surrounding balance and cash flow, as well as the company's questionable accounting are the key reasons why investors should not for bottom fish the dip, at least for now," JPMorgan said.  Though the brokerage retained its 'Overweight' rating and target price of ₹7,550, it said the stock lacks clear, strong catalyst from here till Q3 earnings.

 

That said,  according to ICICI Securities, the related party disclosures on certain transactions are missing on Kaynes and its subsidiary books, while Iskraemcko has reported it. The brokerage firm, however, believes these errors could likely be owing to clerical errors pertaining to disclosures and does not raise concern over accounting discrepancy and transparency.

 

"On Goodwill, the management suggested contract related intangible asset has been largely netted off against it. On working capital days, management has been indicating to bring it down considerably by FY26 by discounting receivables and certain other measures. Management, in its recent interview, asserted that there was no wrongdoing, and that corporate-governance norms had been followed," ICICI Securities said in a note.

   

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