Kaynes Technology shares rally 9% as Jefferies upgrades to buy rating, sees 6% upside
Kaynes Technology India jumped as much as 9% on Wednesday, reaching Rs 5,085.25 on the BSE, after Jefferies upgraded the stock to ‘Buy’ from ‘Hold’. This upgrade came despite the brokerage slashing its target price to Rs 5,400, implying a potential upside of 6% from current levels. Jefferies’ upgrade follows a sharp 28% correction in the stock over the past month, which the brokerage views as overdone.
Jefferies noted that Kaynes Technology remains the most backward-integrated Indian Electronics Manufacturing Services (EMS) player, providing it with a competitive edge in the industry. The company’s core manufacturing operating margin stands at 14-15%, significantly higher than its peers.
Despite a recent slowdown, Jefferies expects the company’s earnings per share (EPS) to grow at a compound annual growth rate (CAGR) of over 50% for FY25-27, supported by a strong order book. However, the brokerage has revised its EPS estimates for FY25-27 downward by 11-15%, citing a normalization of growth rates following a sharp expansion phase.
In the first nine months of FY25, the company’s sales surged 49% year-on-year, while net profit climbed 74% compared to the previous year. Additionally, its order book expanded by 60% year-on-year to Rs 6,000 crore in Q3 FY25, reinforcing its long-term growth potential.
Looking ahead, Kaynes is targeting Rs 3,500 crore in sales from its Outsourced Semiconductor Assembly and Test (OSAT) business by FY30. The company views OSAT as a key growth driver and a crucial component of India’s
