- Shares of Kaynes Technology surged 5% on Friday after recent sharp corrections
- The stock price reached an intraday high of Rs 4,243 from Rs 4,181 closing Thursday
- Analysts see a strong long-term growth story supported by government industry push
Shares of Kaynes Technology India Ltd. are once again on a roll, surging up to 5% on Friday's session. This comes on the back of an immense correction witnessed in the counter over the past week.
Technical and fundamental analysts consulted by NDTV Profit suggest the long-term growth story remains intact for the company, and if finances remain stable, the stock can make a considerable recovery.
Shares of Kaynes Tech are currently trading at Rs 4,181, reaching intraday Rs 4,243 which accounts for 5% gains from Thursday's closing price. It must be noted that Kaynes shares appreciated over 6% on Thursday.
Why Is Kaynes Tech Buzzing?
Astha Jain, Senior Research Analyst at Hem Securities, believes the upward momentum in Kaynes Tech comes after the stock witnessed massive drawdown in the recent past.
"Kaynes Tech already corrected a lot. I believe there is a structural growth story for this counter, which has not changed. Kaynes has a multi-year growth story, which is very strong. They have successfully delivery for module chips and there is a government push in the industry. So there is a lot of positives, which is why we are seeing this kind of rally," she said.
Shares of Kaynes Tech have fallen as much as 35% even if we account for the rally in the last two trading sessions.
A Good Time To Buy?
Jain, a fundamental analyst, believes Kaynes Tech's long-term growth story remains intact and therefore, recommends a buy on this counter.
"If anyone is willing to take a risk, they can start accumulating the stock from now or simply wait for the next earnings report," she said.
Meanwhile, Gaurav Sharma, Associate VP & Head of Research at Globe Capital, is a bit less convinced about Kaynes Tech, especially amid a recent Kotak Institutional Equities report that highlighted corporate governance woes.
“Corporate governance issues have been noticed in the stock. The management has offered some clarification but I believe more is needed," he said.
Talking about the technical aspect of the stock, Sharma added, "The stock has approached its long-term support - close to 3,600, 3,700 levels and a bounce has been witnessed thereafter."
The technical analyst refuses to advocate for a 'buy' rating on Kaynes Tech but believes gradual accumulation can be done, thanks to long-term growth levers in the EMS space.
“I am not advocating a buy at these levels but I believe that gradual accumulation can be done in small tranches because the long-term story for the EMS space is still intact.
"If the company continues to meet growth paths and finances remain stable, I believe in one to two years, the stock could see a reasonable recovery," he concluded.
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