Kaynes Tech Shares Surge After 30% Fall In Five Days — Here's Why
The surge in Kaynes Tech shares come on the back of a positive note from JPMorgan, which has highlighted the company's attractive valuation in the wake of the recent drawdown.
Shares of Kaynes Tech are trending positive in trade on Tuesday in the wake of a few positive brokerage notes. This puts to an end to a sustained run of fall for the stock.
The stock is currently tradinga at Rs 3,925, which accounts for gains of more than 3% compared to Monday's closing price of Rs 3,807.
The surge in Kaynes Tech shares come on the back of a positive note from JPMorgan, which has highlighted the company's attractive valuation in the wake of the recent drawdown.
The brokerage firm even admitted that Kaynes Tech is the cheapest stock under their coverage right now, with the price to earnings to growth ratio of 0.7x.
In its latest note, JPMorgan said Kaynes Tech is currently trending below a bear case and is the cheapest in terms of price to earnings to growth.
While the firm said there is no change in Kaynes Tech's fundamentals, JPMorgan highlighted stretched working capital and receivables as key concerns for the stock.
The firm added that higher working capital assumptions could lead to a bear case fair-value of Rs 4,900.
Nevertheless, JPMorgan retained an 'overweight' rating on Kaynes Tech with a target price of Rs 7,550. This implies a whopping upside of almost 100% from the current market price.
Macquarie, too, has released a report on Kaynes Tech, stressing that management clarification on Kotak report sounded reasonable.
The firm retained an 'outperform' call on Kaynes Tech as well, with a target price of Rs 7,700, an implied upside of more than 100%.
Currently trading at a relative strength index of 20, Kaynes is in severe oversold zone, having contracted up to 40% in the last month or so.
