Why are Kaynes Tech shares locked in 10% lower circuit today? Explained
Sarthak Kumar
Kaynes Technology India Ltd shares came under sharp selling pressure today with the stock falling 10% to hit its lower circuit at ₹3,760.60 on the NSE after the company’s March quarter results missed Street expectations and triggered target price cuts from global brokerages.
The electronics manufacturing services (EMS) company reported consolidated Q4FY26 revenue of ₹1,242.6 crore, up 26.2% year-on-year from ₹984.4 crore. However, net profit declined 21.5% YoY to ₹91.2 crore from ₹116.2 crore in the corresponding quarter last year.
EBITDA for the quarter rose 15.4% to ₹193.6 crore against ₹167.7 crore a year ago, but EBITDA margin contracted 140 basis points to 15.6% from 17%.
Brokerages flagged weaker-than-expected revenue growth, margin pressure and deterioration in working capital metrics as key concerns behind the sharp stock reaction.
JPMorgan downgrades Kaynes Technology
JPMorgan downgraded Kaynes Technology to “Neutral” and cut its target price to ₹4,000 from earlier levels. The brokerage said the company missed its own Q4FY27 revenue guidance by 27% and also fell short of both Street and JPMorgan estimates by 18% and 13%, respectively.
The brokerage further noted that net working capital days remained elevated at 125 days versus management guidance of 85 days.
JPMorgan said it is cutting earnings estimates by 12-17% over the next two years across the core EMS, OSAT and PCB businesses. It also reduced the core EMS valuation multiple to 33x from 45x due to slower expected revenue growth and elevated working capital assumptions.
Despite the downgrade, the brokerage said it still expects strong 40% revenue CAGR and 45% earnings CAGR over FY26-28, driven by the ramp-up in OSAT and PCB businesses. However, it added that the stock may remain a “show me” story until execution improves and the gap between guidance and actual performance narrows.
CLSA expects negative reaction after operational miss
CLSA maintained its “Outperform” rating on the stock with a target price of ₹4,200 but said it expected a negative market reaction following the earnings miss.
The brokerage highlighted that Q4 revenue came in at ₹12.4 billion versus its estimate of ₹15.7 billion and management guidance of ₹17 billion. Margin also declined 150 basis points year-on-year to 15.6%, below CLSA’s estimate of 16.5%.
CLSA further pointed to a weakening balance sheet, noting that working capital increased by 85 days year-on-year, while net debt stood at ₹711 million.
The brokerage said balance sheet deterioration was one of the key concerns heading into the results announcement.
Stock under pressure despite long-term growth expectations
Kaynes Technology has been among the market’s prominent EMS and electronics manufacturing plays, benefiting from India’s manufacturing push and growing opportunities in semiconductor-related businesses.
However, the latest quarterly performance appears to have raised concerns around execution, cash flow efficiency and the pace of scaling newer businesses.
At 9:22 AM, Kaynes Technology shares were locked at the 10% lower circuit of ₹3,760.60 on the NSE, compared to the previous close of ₹4,178.40.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Views mentioned are those of brokerages and analysts.