Kaynes Tech May Cut Revenue Guidance In Q3, Says JPMorgan — Check Slashed Target Price

With the Q3FY26 earnings season just around the corner, JPMorgan has put out a comprehensive preview of the Electronics Manufacturing Service (EMS) space, in which it has given an update on Kaynes Technologies.

The brokerage firm has notably cut the target price on Kaynes Tech, predicting the company to reduce its FY26 guidance on account of delays in revenue from the KAVACH program.

JPMorgan believes Kaynes Tech's FY26 revenue guidance could be cut from Rs 4,300-4,400 crore to Rs 4,000 crore, thus accounting for a reduction of up to Rs 400 crore.

"We cut our FY26–28E revenues by 9–11% mainly led by a cut to FY26 revenues due to delays in revenues from the Kavach program, which we believe would lead Kaynes to cut its revenue guidance for FY26 to ~Rs40bn from the current Rs43–44bn," JPMorgan in its latest note to investors.

The brokerage firm added that it had already cut Ebitda margins by 100-120 basis points over FY27-FY28, anticipating a lower margin in OSAT in the first year of operations and a slower ramp-up over FY28-FY30, compared to the company's guidance.

Keeping that in mind, JPMorgan has cut target price of Kaynes Tech from Rs 7,550 to Rs 6,110. However, the firm remains 'overweight' on the counter as it believes Kaynes offers the highest revenue/earnings per share CAGR of 45% among the stocks in its coverage.

This is quite significant considering the fact that Kaynes Tech shares have fallen to the tune of 50% in the last three months, largely on account of a Kotak note last month that highlighted corporate governance issues.

The Kotak report had also highlighted several discrepancies with the way cash flows were reported, among other issues. Although the management has given several clarifications since, the company has been under immense pressure heading into the Q3 earnings season.