Shares of Kaynes Technology Ltd. has hit lower circuit in trade on Thursday after the company reported a weak set of fourth-quarter numbers, missing analyst estimates all around the park. In the wake of its Q4 result, Nuvama has downgraded the Nuvama downgraded the electronics manufacturing services company to Hold from Buy.
This was thanks to a weaker-than-expected fourth quarter and a significant miss on both revenue and cash flow guidance. Kaynes reported consolidated revenue of Rs 1,242 crore, which represented a 26% year-on-year growth but fell well short of the Rs 1,700 needed to meet its already-downgraded FY26 guidance of Rs 4,100 crore.
Kaynes Tech's initial revenue guidance for FY26 had stood at Rs 4,500 crore, which was cut to Rs 4,100 crore.
Kaynes Technology Q4 FY26 Cons YoY
- Revenue up 26.2% at Rs 1,242.6 crore versus Rs 984.5 crore.
- EBITDA up 15.4% at Rs 193.7 crore versus Rs 167.9 crore.
- EBITDA margin down 140 bps at 15.6% versus 17.0%.
- Net profit down 21.5% at Rs 91.2 crore versus Rs 116.2 crore.
Apart from downgrading stock to 'hold', Nuvama has also cut its target price on Kaynes Tech sharply from Rs 5,500 to Rs 3,550, representing a 35% reduction.
Kaynes Tech's cash flow picture was equally concerning. Operating cash flow came in at negative Rs 600 crore against the guidance of marginally negative to positive, whereas working capital days ballooned to 125 days from 87. This is significantly above the guidance of 85-100 days.
Nuvama noted that Kaynes missed its revenue and PAT estimates by 11% and 17%, respectively, and cut its FY27 and FY28 EPS estimates by 22% and 20%. The brokerage did not rule out further cuts or delays to the company's stated guidance on revenue, PAT growth and cash flow parameters.
Moving ahead, a key monitorable will be Kaynes Tech's concall at 10 a.m. on Thursday, where the management is expected to offer their perspective on how the company missed the revenue and cash flow guidance, among other things.
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