Kaynes Technology shares fall 2% despite MS' overweight' call, sees 22% upside

Kaynes Technology shares have been on a remarkable run, rising 107 percent since the start of the year.

Shares of Kaynes Technology Limited declined 2 percent to Rs 5,338 in early trade on October 1, extending gains for a second session in a row even as Morgan Stanely reiterated its bullish stance with an 'overweight' call and raised the target price stating robust growth prospects.

With a price target of Rs 6,652, the international brokerage firm implies an upside potential of over 22 percent from the last closing price on the NSE. Morgan Stanley's previous target price was Rs 3,845.

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The brokerage remains confident in the company’s core business, supported by customer acquisitions and favourable sector trends. Kaynes' capacity building in OSAT and PCBs is expected to drive further value addition.

Morgan Stanley forecasts a 53 percent EPS CAGR for the core EMS business over FY24-27, with revenue and EBITDA projected to grow 54 percent and 53 percent, respectively, during this period. The upward earnings revision is attributed to a robust order book and new customer additions.

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This comes just a day after the company acquired 100 percent of smart meter company Iskraemeco India, previously held by Iskraemeco Switzerland A.G. and Iskraemeco Merjenje. This strategic acquisition, for Rs 43 crore, is expected to boost Kaynes Tech's products and services in energy management solutions. Iskraemeco India is into the business of supply, installation, operations and maintenance of smart meters. Last financial year, the company's turnover was Rs 65.42 crore.

At about 9:20 am, shares of the company were trading at Rs 5,352, lower by 1.4 percent from the last close on the NSE. Kaynes Technology shares have been on a remarkable run, rising 107 percent since the start of the year.

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