Kaynes Technology India Ltd. has garnered a diverse set of recommendations from both domestic and international brokerages following its June quarter results. The company's Q1 performance presented a mixed picture, with a significant 24% year-over-year decline in profit, falling short of some analyst estimates due to lower other income and a higher tax rate.
Brokerage Consensus and Key Targets
Despite a robust order book of Rs 8,900 crore, marking a 20% increase, and management's maintained revenue growth guidance for FY27, analysts are not entirely aligned on Kaynes Tech's near-term trajectory. The Bloomberg consensus target currently suggests a 5% potential downside for the stock at Rs 3,659.
- Highest Target: MOFSL stands out with the highest target of Rs 5,000, reiterating a 'BUY' recommendation. MOFSL highlighted healthy operating performance and growth across all segments, anticipating continued strong revenue momentum driven by its core EMS business and future contributions from OSAT and PCB segments.
- Lowest Target: Conversely, Investec set the lowest target at Rs 2,790 after the Q1 results.
Diverse Analyst Perspectives
While some brokerages remain optimistic about Kaynes Tech's long-term prospects, others express caution:
Global Brokerage Views:
- Jefferies: Suggested a 'Buy' rating with a target of Rs 4,480.
- Nomura: Maintained 'Neutral' with a target of Rs 4,093.52.
- JPMorgan: Also rated 'Neutral' with a target of Rs 3,600.
- CLSA: Recommended a 'Hold' with a target of Rs 3,580.
Domestic Brokerage Views:
- MOFSL: 'BUY' with the highest target of Rs 5,000.
- Nuvama: Reduced its FY27 and FY28 EPS estimates due to the Q1 miss and outlook, rolling forward valuations to June 2027 estimates for a new target of Rs 3,450 (up from Rs 3,150). They suggested a 'REDUCE' following a recent sharp rally. Nuvama noted an increase in net working capital and net debt quarter-over-quarter.
- IIFL: Suggested 'Add' with a target of Rs 4,449.
- Axis Capital: Also suggested 'Add' with a target of Rs 4,136.
- JM Financial: Gave a 'Reduce' rating with a target of Rs 3,850.
- Equirus Securities: Also issued a 'Reduce' with a target of Rs 3,500.
Kaynes Technology anticipates its OSAT and PCB segments to emerge as key growth engines, with commercialization targeted from Q3/Q4 FY27. The company's expansion into space and defense electronics is also expected to further diversify its growth profile, driving estimated revenue, EBITDA, and adjusted PAT CAGRs of 41%, 44%, and 52% respectively over FY26-FY28, according to MOFSL.