Bengaluru, India – Shares of Kaynes Technology India Limited have plummeted by 42% through 2025, sparking investor concern and debate over the electronics manufacturer's future. The stock, which began the year trading at ₹7,598 on January 1, 2025, dropped to ₹4,358.6 by December 5, 2025. This significant decline comes despite a rallying broader market and robust quarterly financial results from the company. ### ^[1][2]Accounting Practices Under Scrutiny The sharp fall largely stems from a critical report issued by Kotak Institutional Equities. The brokerage firm raised several red flags regarding Kaynes Technology's accounting practices, particularly focusing on goodwill recognition and reserve adjustments related to company acquisitions. Kotak highlighted "multiple mismatches" in disclosures across Kaynes Technology, Kaynes Electronics Manufacturing, and its subsidiary Iskraemeco for the fiscal year 2025. The ^[1][3][4][5]report pointed to inconsistencies in how inter-company transactions were recorded. For instance, large purchases by Iskraemeco from Kaynes Electronics Manufacturing, amounting to ₹180 crore, were reportedly not reflected in Kaynes Electronics Manufacturing's own disclosures. Similarly, year-end payables and receivables between the entities did not appear consistently in standalone financial statements. Kaynes^[3][4][5] Technology addressed these concerns, clarifying that previously unrecognised intangible assets could be part of acquisition accounting, and customer contracts could be amortized over their term. The company also stated that while related-party transactions were eliminated in consolidated financial statements as per Indian Accounting Standards, they were "inadvertently not disclosed" in standalone statements. Kaynes management confirmed these issues have since been rectified and noted for future compliance. ### Hi^[1][5]gh Valuations and Working Capital Pressures Beyond the accounting questions, analysts also cited the stock's high valuation expectations as a factor in its decline. Even though Kaynes Technology reported strong numbers for the second quarter of fiscal year 2026, the market had set very high benchmarks. The company's revenues for Q2 FY26 reached ₹9,062 million, a 58% increase year-over-year. Net profits also doubled to ₹1,214 million from ₹602 million in the same period last year, with gross profit margins improving to 16.3% from 14.4%. However, the^[1][6] Kotak report and other analyses also brought attention to elevated working capital stress and rising debtors. Investec, another global brokerage, echoed concerns, noting that most of Kaynes' recent growth and margins were driven by the acquired Iskraemeco business, which carries a heavy working capital burden. Investec questioned the slowing performance of the core Electronics Manufacturing Services (EMS) business and limited progress in other strategic investments. ### Company ^[3][5]Profile and Growth Ambitions Kaynes Technology India Limited is a prominent end-to-end and IoT solutions-enabled integrated electronics manufacturer. The company, established in 2008, offers services ranging from conceptual design and process engineering to integrated manufacturing and life-cycle support. It caters to diverse sectors including automotive, industrial, aerospace, defense, medical, railways, and the Internet of Things (IoT). The company ^[1][7][8]has also expanded into high-value manufacturing segments such as Outsourced Semiconductor Assembly & Test (OSAT) and advanced Printed Circuit Board (PCB) production. This strategic shift aims to move Kaynes from being solely an EMS provider to an integrated Electronics System Design & Manufacturing (ESDM) company. Kaynes Techn^{[6][9][10][7]}ology reported a robust order book of ₹80,994 million as of September 30, 2025. This strong pipeline provides good revenue visibility for the second half of fiscal year 2026 and beyond. The company maintains an ambitious revenue guidance, aiming for $1 billion by fiscal year 2028 and $2 billion by fiscal year 2030. It also launched India's first commercially manufactured IPM multi-chip module through its subsidiary, Kaynes Semicon Private Limited. ### Analyst Vi^[1][6]ews: Buy the Dip or Exercise Caution? The significant drop has led to varied opinions among financial analysts regarding whether investors should "buy the dip." Currently, the consensus rating from 21 analysts covering Kaynes Technology is "Buy," with an average 12-month price target of ₹6,953.43. This suggests a potential upside of nearly 60% from its current trading price. Several firms, i^[11][12][13]ncluding JPMorgan and Nomura/Instinet, maintain "Buy" or "Overweight" ratings with bullish price targets. For example, JPMorgan has a target price of ₹7,550. However, even some^[14][13] bullish analysts advise caution. JPMorgan, despite its "overweight" rating, explicitly warned investors not to "rush" into "bottom fishing" at current levels. The firm noted that while Kaynes Technology's fundamentals and guidance remain unchanged, negative sentiment has caused immense selling pressure, making it difficult to predict when the stock will find its bottom. Investec holds a "Sell" rating on the stock. The stock's 52-wee^[14][15][13]k high was ₹7,824.95 on January 1, 2025, and its 52-week low was ₹3,835 on February 11, 2025. The company's market capitalization stood at approximately ₹29,217.72 crore as of December 5, 2025. Investors are closely wa^[1][2]tching Kaynes Technology as it navigates these accounting concerns and working capital challenges, weighing them against its strong order book and ambitious growth plans in India's expanding electronics manufacturing sector.

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