Kaynes Tech shares surge on Buy call from Nomura, Jefferies after 35% fall in a month

Nomura has maintained a 'Buy' call on Kaynes Technology, while Jefferies has upgraded the stock to a 'Buy', while reducing the target price to Rs 5,400 per share from Rs 6,950. In early trade on January 29, shares of Kaynes Tech were higher by over 7% on NSE.

Shares of the company have seen a sharp correction of around 35% over the past one month.

Jefferies said Kaynes' core operating profit margin (OPM) remains strong at 14-15%, significantly higher than its peers. For the first nine months of FY25, Kaynes reported robust growth, with sales increasing by 49% on-year and net profit rising by 74% YoY. The company's order book for Q3 has grown by 60% on-year to reach Rs 6,000 crore.

Looking ahead, Kaynes is aiming to achieve Rs 3,500 crore in sales from its Outsourced Semiconductor Assembly and Test (OSAT) business by FY30. The company's estimated earnings per share (EPS) is projected to grow at a compound annual growth rate (CAGR) of 50% between FY25 and FY27, driven by a strong order book, said Jefferies.

Read More: Kaynes Tech shares dive after trimming FY25 revenue growth guidance

Nomura has maintained a 'Buy' call on Kaynes Technology with a target price of Rs 6,146 per share. The company is benefiting from strong demand tailwinds in the Electronics Manufacturing Services (EMS) sector, said Nomura.

While Kaynes' Q3FY25 EBITDA came in below estimates, healthy order wins provide strong growth visibility.

The company sees long-term catalysts in its Outsourced Semiconductor Assembly and Test (OSAT) and Printed Circuit Board (PCB) businesses.

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For FY25E, Kaynes is targeting revenue of Rs 28-2900 crore while maintaining an operating margin of over 15%. The stock is currently trading at 36x its forecasted FY27 earnings per share (EPS).Over the past month, the stock has experienced significant volatility, with a notable decline from its early January high. On January 28, shares of Kaynes Technology fell by over 11%, and in last one month, it is down by 35%.