After falling in trade on Wednesday on the back of a target price cut from Kotak Securities, Kaynes Technology has received a price cut from yet another renowned brokerage firm in Nomura.
In its latest note, Nomura has highlighted the key concerns raised by the Kotak Institutional Equities report that has dragged the stock down significantly in recent trading sessions.
Although the brokerage firm has retained a 'buy' call on Kaynes Tech, it has significantly reduced its target price from Rs 8,478 to Rs 5,455. This compares to Kaynes' current market price of Rs 3,876 as of Wednesday market close.
Nomura pointed out that the firm has re-aligned its growth target on Kaynes Tech following smart meter challenges highlighted by the Kotak report.
The firm believes the growth in segments barring smart meters, could serve as a key catalyst for the stock to move upwards.
Cashflow improvement also remains a key monitorable as Kotak's report had raised concerns surrounding how cashflow was reported in Kaynes Tech's FY25 annual report.
Furthermore, Nomura believes growth drivers need to be re-assessed given the significant drag on working capital, another factor Kotak Institutional Equities had highlighted in its critical report.
As far as the valuation is concerned, Nomura has lowered target price to earnings ratio from 50x to 35x, thanks to the slightly lower growth outlook for the company.
Although Kaynes Tech management has categorically denied most of the allegations from Kotak, first on NDTV Profit and later during an analyst call earlier this week, brokerages remain slightly cautious on the stock, including Nomura.
At the same time, though, some brokerages have remained bullish on Kaynes and expect a strong upside even after the recent issues around corporate governance, including JPMorgan.
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