0 Bonus, Split & Dividends: Why Kaynes Technology Crashed 31% And Hit New 52-Week Low? Buy This BSE 500 Stock?

Kaynes Technologies has crashed significantly over the past five sessions. The BSE 500 listed stock recorded more than a 31% decline since December 2, erasing its Rs 5,450 mark and hitting below Rs 3,800 levels. One major reason why investors have turned extremely bearish in Kaynes is a report by Kotak Institutional Equities, which has identified several mismatches between the disclosures made by Kaynes Technology, Kaynes Electronics Manufacturing, and its subsidiary Iskraemeco during financial year 2024-25.

Does the latest decline bring a buy-on-dip opportunity?

Why Are Kaynes Technology Shares Crashing?

On December 9th, Kaynes stock saw a rapid shift from deep selling to trading bullion. In the opening bell of Tuesday, Kaynes touched a new 52-week low of Rs 3713.75 apiece on BSE. But the stock soon recovered from its early losses and traded at Rs 3919.30 apiece, up by 3.2% on BSE, with a market cap of Rs 26,250.77 crore at the time of writing.

After market hours on December 8th, Kaynes nosedived by nearly 13% to end at Rs 3799.60 apiece on BSE, with a market cap of Rs 25,470.49 crore.

Kaynes share price entered into a frenzy of selling since December 2nd. In the past five sessions, the highest level of Kaynes was Rs 5,454 apiece on BSE, which has crashed by over 30% to the current market price of Rs 3,799.60 apiece.

Despite the latest recovery, Kaynes continues to trade lower by 28.5% from Rs 5,454 mark.

The midcap stock dropped by at least 12.5% on December 4, followed by 6.3% and 2% decline on December 3rd and 2nd.

Taking into consideration the 52-week low and Rs 5,454 mark, Kaynes has contracted by at least 31.91% on BSE.

Kaynes is that one stock who has zero bonus, split or dividend rewards.

Why Is Kaynes Technology Under Pressure?

The troubles at Kaynes emerged after Kotak Institutional Equities report dated December 3rd. The report signalled multiple mismatches between the disclosures across Kaynes Technology, Kaynes Electronics Manufacturing, and its subsidiary Iskraemeco for FY2025. This was concerning the analysts over Kaynes balance sheet representation and cash flow activity.

Kotak's report raised alarms over Kaynes' acquisition of Iskraemeco, along with the purchase of a 54% stake in Sensonic for Rs 88.3 crore. The brokerage noted that while Rs 114 crore of goodwill was recognized, the FY25 balance sheet showed no corresponding increase. Instead of this, the balance sheet showcased a small negative adjustment and rise in general reserves.

As per the report, Kaynes management stated that the purchase price for Sensonic was seen as an intangible asset. But Kotak's note observed that nothing related to this or fair value adjustments were disclosed in the balance sheet. Even the Rs 72.5 crore payment was not reflecting in the cash flow statement.

Kaynes Technology Clarification On Kotak Report:

Right after the Kotak report, Kaynes notified BSE and NSE, saying, "At the outset, we would like to emphasize that we respect 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. We also believe it is our responsibility to provide clear, factual information so that the investor community can evaluate the company with confidence."

Should You Buy Kaynes Technology Share Price?

The consensus recommendation from 21 analysts for Kaynes Technology is BUY, as per Trendlyne data. The average target price is set at Rs 6857.71 apiece, signalling potential upside of 77.2% ahead.

On the other hand, global broker JP Morgan kept its stance on Kaynes unchanged. JP's bear-case fair value on Kaynes is around Rs 4,900.

The global broker highlighted that 1H26 NWC stood at 116 days vs 87 in FY25 due to the increase in smart meter contribution to revenues that operates at a higher 90-1 20 days cycle compared to the core business at 60-90 days. Hence, it added, "in our bear case we assume in our DCF a NWC of 1 1 6 days over FY26-35E vs the base case of 75 days, meaning no improvement at all, which drives bear-case fair value of Rs 4,900 (29% potential upside from CMP)."

Prior to Kotak report, analysts at Emkay Global said, "We attended the analyst meet hosted by Kaynes Technology (KTIL), where the management laid out its blueprint of growth and margin over the next 5 years. KTAs:

1) The management reiterated its 60% FY26 revenue growth guidance (strong Rs80 billion order book; FY25 revenue: Rs27.2 billion) and pointed to the potential of achieving $1 billion revenue (on TTM basis) earlier than the target of FY28, with FY30 revenue at Rs2 billion (FY25-30 CAGR: 45%).

2) EBITDAM is set to see expansion based on 5 key levers: i) richer product mix, ii) scarcity of manufacturers in low-volume high-tech, iii) push into advanced PCBs (HDI/multi-layer/flex) and high-tech products, iv) backward integration into components, and v) rising ODM share.

3) With the pilot OSAT plant now operational and the main plant to come onstream by the end of Dec-25, KTIL aims for Rs1/10 billion in FY26/27 (bulk of phase 1 capacity already tied up) and Rs5 billion in HDI PCB revenue in FY27.

4) KTIL aims to place a dummy satellite in orbit by May-26 and launch the operational satellite by Dec-26, with 3 core capabilities: a) satellite design, b) in-house ADS (Attitude Determination System), c) scalable Command and Control Centre for large drone fleets.

5) Export share set to rise to 20%; NA operations could add 15% of consolidated revenue by FY30, taking export/export-denominated revenue to >30% of consolidated revenue.

6) OCF to turn positive by FY26 end on monetization of Rs3 billion receivables, with working capital set to improve to 70-80 days vs 116 days as of H1FY26. KTIL trades at 41x FY28 Consensus EPS.

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