Brokerages Jefferies and Nomura remain bullish on Kaynes Technology, despite a 38% stock correction in the past month. Both firms maintained Buy ratings, citing strong order book growth, robust sales, and long-term catalysts in the EMS and OSAT space.

Jefferies on Kaynes: Upgrades to ‘Buy’, cuts target to ₹5,400

Jefferies has upgraded Kaynes to ‘Buy’ while reducing its target price from ₹6,950 to ₹5,400, citing attractive valuations after the recent stock correction.

  • The stock has corrected nearly 38% in the past month, making valuations more favorable.
  • Core operating margins (OPM) remain at 14-15%, significantly higher than peers.
  • 9MFY25 sales and PAT growth stand strong at +49% and +74% YoY, respectively.
  • Q3 order book surged 60% YoY to ₹60 billion, highlighting robust demand.
  • Company targets ₹35 billion in sales from the OSAT business by FY30, positioning itself for long-term growth in semiconductor packaging.
  • FY25-27 earnings CAGR estimated at 50%, driven by a strong order book.

Nomura on Kaynes: Maintains ‘Buy’, target at ₹6,146

Nomura retained its ‘Buy’ rating with a target price of ₹6,146, emphasizing structural tailwinds in the EMS sector and long-term growth from OSAT and PCB expansion.

  • 3Q EBITDA was below estimates, but strong order wins enhance long-term visibility.
  • OSAT and PCB segments remain key long-term catalysts, providing future growth potential.
  • Company aims for ₹28-29 billion in revenue for FY25, with sustained EBITDA margins above 15%.
  • Stock currently trades at 36x FY27 estimated EPS, reflecting its high-growth potential in the electronic manufacturing ecosystem.

Market Outlook

Kaynes Technology continues to attract investor interest despite short-term concerns. Analysts highlight the strong order pipeline, superior margins, and long-term expansion plans as key positives. However, near-term valuation concerns and recent stock volatility may keep the market cautious.

Disclaimer

This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult professionals before making investment decisions. Business Upturn is not responsible for any investment outcomes based on this report.

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