Shares of Kaynes Technology Ltd. came under sharp pressure on Monday, December 8, falling 4.5% in early trade. The decline has deepened losses from last week, which marked the stock’s worst weekly performance since its market debut.
The management clarified that no intangible assets are involved in the acquisition of Sensonic and maintained that the company’s financial reporting remains accurate and reliable. It said a minor typing error occurred in the documentation of a subsidiary, leading to the omission of a related-party disclosure in the notes to accounts. The error is now being corrected. The company also rejected most of the allegations made in a recent report by Kotak Institutional Equities, stating there are no irregularities in its accounting practices.
On the operational front, Kaynes said its net working capital days have increased from 83 to 87 as per IAS standards. The management noted that faster working capital movement is common in the Electronics Manufacturing Services (EMS) industry and said several steps are being taken to improve efficiency.
Sharing its forward strategy, the company said it plans to reduce its dependence on the smart meter business, citing stronger growth opportunities in the automobile, industrials, railways and electronics segments. The management also reiterated that there are no plans to dilute promoter stake, which currently stands at 53.46%.
Meanwhile, JPMorgan, in its note issued on Friday, maintained an “Overweight” rating on the stock but cautioned that it is difficult to predict the bottom at this stage. The brokerage advised investors to avoid bottom-fishing for now, stating that there is no major trigger expected before the company’s Q3 results.
At around mid-day on Monday, Kaynes Technology shares were trading nearly 3.7% lower at ₹4,192. The stock remains under the F&O ban, restricting fresh derivative positions. From its all-time high of ₹7,822, the stock has now corrected nearly 46%, even after delivering a massive 455% return over the past four years.
