Kaynes Technology recovered nearly 6% during intraday trading

Shares of Kaynes Technology recovered nearly 6% during intraday trading on Monday after declining sharply in early trade following the company’s June-quarter results. The stock fell nearly 9% to an intraday low of ₹3,535 per share on the NSE after the results were announced post-market hours on Friday. It subsequently pared losses and was trading at ₹3,726 per share, down 3.38%. JPMorgan said Kaynes Technology beat expectations on both revenue and margins for the first time in at least five quarters. Revenue grew 40% YoY and came in 10% above consensus estimates and 12% ahead of JPMorgan’s estimates. Although EBITDA margin declined 120 basis points YoY to 15.6%, it was still 50 basis points above consensus estimates and 60 basis points ahead of JPMorgan’s estimates. The company’s core electronics manufacturing services (EMS) business, excluding smart meters and August Electronics, grew 66% YoY during the first quarter, highlighting strong underlying growth. However, working capital remains a key concern. Net working capital days increased to 163 days from 125 days in Q4FY26, primarily due to smart-meter collections spilling over into July and higher inventory days amid supply-side challenges. The company expects to achieve positive operating cash flow by the end of FY27. Kaynes Technology has described FY27 as a challenging year but expects to respond more quickly to changing market conditions than its peers. The company also expects profitability to normalise over the next couple of quarters. Meanwhile, the smart-metering business is expected to turn cash-positive by the end of the year. The company plans to announce a detailed de-risking strategy in February next year, while greater clarity on its service-to-product model is expected by Q3.