Kaynes Technology's stock cratered to almost 20% on Thursday's trade, a day after the company reported its fourth quarter results for the financial year ending March 2026, where revenues of Rs 1,242 crore weren't enough to meet the full year guidance of Rs 4,100 crore. But despite the headline disappointment, the company's managing director, Muthukumar Narayanaswamy, pointed to one business that is quietly bleeding the company's cash: Smart meters.
Speaking to NDTV Profit, Narayanaswamy pointed out that Kaynes Tech has been able to clean up its act by bringing debtor days from 83 to 55 while posting a standalone operating cash flow at Rs 255 crore versus Rs 65 crore last year. However, it is the metering segment that is ailing the company.
"Our receivables have gone to Rs 1,365 crores. We are working on the next three quarters to clear up to about Rs 1,000 crores," he said.
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That single number explains almost everything retail investors need to understand about why Kaynes is sitting on a Rs. 600 crore negative operating cash flow at the consolidated level, even at a time when the company's core business has quietly improved.
Narayanaswamy went on to explain that the metering acquisition was designed to migrate Kaynes from an EMS supplier to a product company. However, the new business model came with a brutal working capital reality that has since ailed the company.
"This gives us a product company, this gives us expanded margins on this product, but this has given us long working capital management. Having understood this, we have done the course correction."
Kaynes' problems are compounded by the government reimbursement restructure. The company has deployed roughly Rs 1,450 crore of a Rs 3,300 crore capital expenditure plan and qualifies for a 50% central government subsidy and a 20% state government subsidy. But both are disbursed only after hitting the execution milestone, thus putting further strain on cash flow.
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Narayanaswamy, though, insisted the worst is behind them. "This year, about 60 to 70% of the capital funding we'll be getting back into the subsidies. The smart metering peaking has already gone — now we are going to get the collections of the last 18 months."
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