Despite near-term margin pressures and working capital intensity, Kaynes' diversified portfolio, strategic acquisitions, and tech-driven manufacturing capabilities position it as a leading player in India's EMS and semiconductor ecosystem. The brokerage sees long-term structural growth intact, making Kaynes a compelling investment opportunity.
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PL Capital Report
PL Capital has reiterated its 'Buy' rating on Kaynes Technology India Ltd. with a revised target price of Rs 5,624 (earlier Rs 7,565), implying a potential upside of 48% from current levels.
The revision follows a downward adjustment in FY26–FY28 earnings estimates by 1.8–11.5%, primarily due to margin recalibration and accounting clarifications post recent acquisitions.
Management clarifies key business concerns
Company hosted a conference call to address key business-related concerns, during which management provided detailed clarifications on the accounting treatment of goodwill vs intangible assets on account of Iskraemeco and sensonic acquisitions, progress on receivable management, and the steps taken to improve accuracy in related-party transactions, margin reporting, purchase price allocation, and related-party disclosures.
Kaynes also provided clarity on cash flow reconciliation and broader working capital metrics. Management indicated that financing arrangements such as bill discounting and factoring are not expected to materially impact on overall profitability.
Smart metering will constitute a declining portion of the portfolio as other verticals—including automotive, industrial, EV, railways, aerospace, and defense—continue to scale.
The company reiterated its ongoing efforts to strengthen internal controls, enhance disclosure quality, and improve receivable management.
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