Kaynes Technology shares rise 14% from 52-week low; is the upside capped?

Shares of Kaynes Technology rose 14% from their 52 week low in three sessions on the back of value buying and positive reports by some brokerages. The stock, which resumed its winning run for the second straight session today, slipped to a 52-week low of Rs 3713.75 on December 9.

Prior to that, the Kaynes stock crashed 30% to 52 week low during four sessions. The selloff was triggered after Kotak Institutional Equities raised concerns regarding inconsistencies in the company's related-party disclosures for FY2025. In a note, Kotak said it had identified multiple mismatches between the disclosures made by Kaynes Technology, Kaynes Electronics Manufacturing, and its subsidiary Iskraemeco for FY2025.

Subsequently, the stock closed 6.3% lower at Rs 4,971.50 on December 4. 

Meanwhile, in the current session, the Kaynes stock gained 5% to Rs 4267 in the current session. Market cap of Kaynes Technology rose to Rs 28,460 crore. The stock has lost 44% this year and fallen 35.65% in a year.

Total 5.42 lakh shares of the firm changed hands amounting to a high turnover of Rs 227 crore on BSE today. 

Meanwhile, global brokerage JP Morgan has reiterated its Overweight stance and a Rs 7,550 target price for the stock. 

According to JP Morgan, the company's fundamentals are intact and the recent derating appears tied to short-term liquidity strain. 

Kaynes’ core EMS business continues to expand, and the JP Morgan valued it at Rs 5,200 per share, with additional value coming from its OSAT and PCB segments. 

Brokerage Way2Wealth believes that despite the recent decline, the long-term trend remains bullish, as reflected by the monthly and quarterly moving averages, which continue to slope upward. The current correction towards
the demand zone therefore appears to be a re-entry opportunity for long-term investors.

The brokerage suggests accumulating the stock in the zone of Rs 4045– Rs 3850 with a stop loss placed below Rs 3550. 

"A rebound towards Rs 5000–Rs 5250 is expected in the near to medium term. (Time frame 6-8 months," it said. 

On the other hand, global brokerage Nomura cut price target to Rs 5,455 (from  Rs 8,478) on 35x FY28F EPS, discounted to Dec-27F. 

According to the brokerage, cash flow improvement remains a key monitorable; ex-smart meter growth recovery could serve as a catalyst. It maintained a buy call on the stock. 

Kotak Securities also cut its price target to to Rs 4,150 from Rs 6,180 while maintaining its "reduce" rating on the stock. 

Mysore-based Kaynes Technology is a leading end-to-end and IoT (Internet of Things) solutions enabled integrated electronics manufacturing player, having capabilities across the entire spectrum of electronics system design and manufacturing services.