Jefferies bullish on Kaynes Technology: Check target price and big upside

Kolkata: Kaynes Technology India is an end-to-end and IoT solutions-enabled integrated electronics manufacturer in India. By the way, IoT solutions are integrated systems of devices, sensors, software and analytics and these allow businesses and individuals to solve problems and improve efficiency by collecting and analysing data. The company boasts of capabilities in the entire range of Electronics System Design and Manufacturing services.

This Mysore-based company boasts of more than 30 years of experience when it provided conceptual design, process engineering, integrated manufacturing and life cycle support for companies in automobile, industrial, aerospace and defence, outer-space, medical, railways, internet of things (IoT) and other domains. The company has 10 global certifications and more than 250 clients in three continents and eight manufacturing plants, the company's website says.

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Major US-based brokerage firm Jefferies has maintained its ‘Buy’ recommendation on Kaynes Technology India stock. It has also announced a target price of Rs 7,780. Around 12 noon on Thursday, Dec 4, the Kaynes Technology India stock was trading at Rs 5,124, down Rs 183 or 3.45%. From this level, the target price set by the brokerage represents a nearly 52% upside. Of the 27 analysts that have initiated coverage on the Kaynes Technology stock, 13 have a "buy" rating, nine have assigned "hold" rating and four have advised "sell".

Jefferies has mentioned that the company suffers from stretched working capital. But following an interaction with the company's management, the brokerage has said that the CFO has outlined steps that have been initiated to ameliorate the situation. The brokerage thinks that working capital will stay elevated at around 115 days in the January-March quarter. And this will be around 35-40% of the estimated sales in FY26.

The company seems to have big plans on the operations front. Jefferies said by Q1FY27 (April-June 2026) the company is trying to move to full-scale production of 1.5 million chips a day. Kaynes has already shipped its pilot OSAT order of 900 chips to client AOS. The mysore-based firm has also secured ECMS (Electronics Component Manufacturing Scheme) approvals for high-density interconnect and multi-layer PCBs, camera modules and laminates, which strengthens its manufacturing capability.

Thanks to these new thrust areas, Jefferies has estimated a robust growth trajectory for the company. It says it is possible for sales and EPS to achieve a CAGR of 51% between FY25 and FY28.