Kaynes Technology up 42% in a year; Motilal Oswal Wealth sees 11% upside

Motilal Oswal believes that electronic manufacturing services (EMS) companies like Kaynes Tech have strong ties with Chinese component manufacturers

Kaynes Technology shares rose 1.6 per cent on Tuesday and logged an intra-day high at ₹6,707 per share on BSE. At 9:18 AM, Kaynes Technology's share price was trading 1.56 per cent higher at ₹6,702.9 per share. In comparison, the BSE Sensex was up 0.23 per cent at 80,553.25. 

 

The market capitalisation of the company stood at ₹44,932.66crore. The 52-week high of the stock was at ₹7,824.95 per share, and the 52-week low was at ₹3,835.

 

In one year, Kaynes Technology shares have gained 41.7 per cent, as compared to Sensex’s decline of 2.6 per cent.  READ LATEST STOCK MARKET UPDATES LIVE

 

Why were Kaynes Technology shares rising? 

The buying on the counter came after the company’s subsidiary, Kaynes Semicon, signed an agreement with US Technology International Private Limited for UST to buy Compulsorily Convertible Preference Shares (CCPS) in Kaynes Semicon, which will later be converted into regular equity shares, as detailed in the agreement.

 

Kaynes Semicon shall allot 27,778 Compulsorily Convertible Preference Shares (CCPS), which shall be converted as 13,158 CCPS converted into 13,158 equity shares i.e., 5 per cent of the share capital on the closing date of the Securities Subscription and Shareholders’ agreement (SSSA). The conversion of balance 14,620 CCPS is subject to fulfillment of revenue-linked milestones as set out in the SSSA.  ALSO READ | 4 reasons why Motilal Oswal upgraded Phoenix MillsStock to 'Buy'; target raised

Brokerage view 

Domestic brokerage Motilal Oswal has maintained a ‘Buy’ rating on Kaynes Technology with a target of ₹7,300, which translates to 10.6 per cent upside from Monday’s close at ₹6,599.95 per share.  

 

The brokerage believes that electronic manufacturing services (EMS) companies like Kaynes Tech have strong ties with Chinese component manufacturers. The supply chain will improve after the Indian Prime Minister’s meeting with the Chinese President on imports of key parts from China. 

 

Additionally, Kaynes Semicon will allot 27,778 compulsorily convertible preference shares, offering up to 10 per cent share capital upon conversion, to US Technology International (UST) for collaboration in the semiconductor packaging business, which is positive. 

 

Also, Kaynes Semicon is setting up an Outsourced Semiconductor Assembly and Test (OSAT) plant in Sanand, Gujarat. Kaynes Technology expects its semiconductor business to generate over ₹1,500 crore in revenue by financial year 2028. 

 

The bulk of investments will happen this year and in the financial year 2027, with the first phase covering legacy packaging and wire bonding, the brokerage noted.