Kaynes Tech shares tumble 12%: JPMorgan advises investors to 'avoid bottom fishing'

Kaynes Tech shares crash

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26 Aug, 2025 12:21

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The shares of Kaynes Technology India tumbled more than 12 percent on December 5, extending significant losses for the second consecutive session after Kotak Institutional Equities raised concerns over inconsistencies in the company's related-party disclosures. JP Morgan recommended investors to avoid "bottom fishing" in the shares.

The shares of the EMS player closed at Rs 4,365 apiece. Earlier during the day, the stock fell more than 13 percent to hit an intraday low of Rs 4,311 apiece, the lowest level seen by the stock in nearly eight months. The stock has now fallen nearly 17 percent in just two sessions since the alleged irregularities were highlighted by Kotak.

Kotak's allegations, Kaynes' clarification:

In its note, Kotak Institutional Equities said that it has identified multiple mismatches between the disclosures made by Kaynes Technology, Kaynes Electronics Manufacturing, and its subsidiary Iskraemeco for the financial year 2025.

According to the brokerage, Iskraemeco’s filings show purchases of Rs 180 crore from Kaynes Electronics Manufacturing, but this transaction is not reflected in Kaynes Electronics Manufacturing’s own related-party disclosures. Iskraemeco also reported year-end payables of Rs 320 crore to Kaynes Technology and Rs 180 crore to Kaynes Electronics Manufacturing, along with receivables of Rs 190 crore from Kaynes Technology. These balances, Kotak noted, do not appear in the corresponding disclosures of Kaynes Technology or Kaynes Electronics Manufacturing.

Kaynes Technology issued a clarification on December 5, stating that these were inadvertently not disclosed in the standalone financial statements. “This has been rectified and has been noted for future compliance. This transaction was part of the overall financial statement in both the entities,” the firm said.

Kotak further said that almost all of Iskraemeco’s current receivables were shown as due from its parent company, with Rs 45.8 crore outstanding for more than a year.

The brokerage said the inconsistencies warrant closer scrutiny, as they raise questions on inter-company transactions and year-end balances within the group.

Here's what JPMorgan said:

JPMorgan advised investors to avoid "bottom fishing" in the shares of Kaynes Technologies, as it does not see a clear, strong catalyst for the stock till it reports its third quarter results, CNBC-TV18 reported. The international brokerage however continues to remain ‘Overweight’ on the stock, with a target price of Rs 7,550 apiece. This implies an upside potential of nearly 52 percent from the stock’s previous closing price.

JPMorgan said that Kaynes is now facing balance sheet and cash flow concerns with question marks on cash flow and revenue growth as well as ex-smart meters. The brokerage said that the stock has been on a downward trajectory after its Q2 results and it is difficult to predict when the stock will make a bottom given that neither the fundamentals nor the guidance have changed but sentiment is driving the stock down, the business news channel reported.

Kaynes Tech share price history:

Kaynes Tech shares have fallen around 21 percent in the past five days, and 31 percent in the past one month. The stock dropped 23 percent in the past six months, and is down more than 42 percent in 2025 so far.

Its P/E ratio currently stands at over 105.

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