Why Kaynes Technology Has Wiped Off Almost 50% Of Investor Wealth In 2025
The current 12-month target price for the company stands nowhere close to the share price the stock traded at on January 1.
Kaynes Technology has seen a constant drag in 2025. The stock of the company traded at almost Rs 7,600 apiece at the start of the year and now trades at levels around Rs 3,950 apiece, marking a 48.4% fall year-to-date.
The stock that delivered a return of 170% in 2024, has now lost over Rs 23,000 crore in market cap in the last 32 trading sessions.
Here are a few reasons why the stock has plunged in 2025:
Q3 Earnings Disappointment
Despite Kaynes Technology's Q3 revenues seeing a 30% annual growth, the Rs 660 crore number came lower than what the Street expected. The miss on expectations was largely due to weaker than expected performance of the company's industrial segment. The segment recorded only a 37% annual growth in revenues due to delayed execution of smart meter orders during the quarter. This compares to the 125% to 217% growth the segment had showed in the last few quarters.
Furthermore, despite the company's Ebitda and net profit increasing 35% and 47%, respectively, on an annual basis in Q3FY25, the numbers missed Street estimates by 20% to 24%.
Guidance Lowered
Management also reduced its FY25 revenue guidance from Rs 3,000 crore to Rs 2,800- 2900 crore. After this revised guidance commentary, the 12-month forward earnings per share estimated by analysts as per Bloomberg were reduced by 7.45%.
Valuations
Kaynes Technology still trades at a triple digit price to earnings multiple of 128, as per Bloomberg. This is still at the same level of the stock's 5-year average valuation of 129.
When compared to its peers, Kaynes trades at a higher multiple compared to Syrma SGS Technology, but at lower valuations when compared to Amber Enterprises.
What Does The Street Think?
Despite the steep correction, the Street still remains largely bullish on the counter. Out of the 23 analysts tracking the stock, 17 maintain a 'Buy' on the stock, while 4 analysts maintain a 'Hold' rating and two recommend a 'Sell'.
From November 12, 2024, till January 21, 2025, the share price of the company was trading higher than the consensus target price, as per Bloomberg. Currently, the stock trades at the largest discount to its consensus price target ever seen.
The 12-month consensus target price of the company has been reduced 10% so far in 2025 to Rs 5,440 apiece. While this does indicate a 39% upside from the current levels, it's nowhere near the share price the stock traded at on January 1.
