Shares of Kaynes Technology staged a recovery (gaining 7 per cent) on Tuesday after a steep and extended decline that saw the stock lose nearly 30 per cent over the past five trading sessions. The turnaround comes a day after the company issued a detailed clarification addressing concerns raised in recent analyst reports.
In its response, the integrated electronics manufacturing services (EMS) company stressed that the issues flagged were overstated and largely unfounded.
Kaynes Tech calls out report conclusions “factually incorrect”
Kaynes acknowledged only one error in its financial statements, described as a “small typographical omission” in the notes relating to a related-party transaction within a subsidiary. The discrepancy, the company said, has already been corrected and will be accounted for in future compliance processes.
The management further stated that several conclusions drawn in reports by Kotak Institutional Equities, BNP Paribas and Investec were “factually incorrect.” It reiterated that there were no inconsistencies or ambiguities in its books. All underlying financials, it said, remained accurate.
Clarifications on goodwill, asset capitalisation and accounting treatment
One of the major concerns raised in recent reports centered on goodwill recognition following Kaynes’ acquisition of Iskraemeco and Sensonic for ₹88.3 crore. The company reported recognising ₹114 crore in goodwill; however, analysts noted that the consolidated balance sheet did not reflect a corresponding rise.
Kaynes addressed this by explaining that the transactions were accounted for in accordance with Ind-AS 103 standards. The difference between consideration paid and net assets acquired was netted off to present the statements in what it termed a “relevant and reliable manner.” Additionally, intangible assets worth ₹115 crore —arising from customer contracts linked to smart metering technology—were classified under technical know-how.
The firm also dismissed claims of mismatches between fixed asset additions and cash flow reporting. It clarified that the ₹950 crore purchase of fixed assets recorded in the cash flow statement includes ₹780 crore worth of PPE, CWIP and intangibles, alongside ₹1.7 billion expended on right-of-use assets, adjusted for subsidies.
Receivables, working capital and business expansion
Addressing concerns around rising receivables and elongating working capital cycles, Kaynes noted that ₹687 crore of smart metering receivables as of September included longer-tenure contractual components which will be discounted and phased out. The company expects ₹240 crore of this amount to be cleared shortly.
The management attributed the broader working capital expansion to industry-standard EMS dynamics and its ongoing investment cycle. Long-term capex initiatives—including OSAT and PCB capacity expansions funded through QIP proceeds and subsidies—have temporarily inflated working capital requirements.
Strong revenue growth despite market volatility
Despite recent turbulence in its share price, Kaynes reported robust financial performance. FY25 revenue stood at ₹2,720 crore, marking a 51 per cent year-on-year rise. This growth was driven largely by the integration of Iskraemeco’s smart metering business.
Promoter holding also remains steady at around 63 per cent, with the company confirming that no dilution is planned.
Market Reacts to Clarity
Tuesday’s rebound suggested that investor sentiment may be stabilising as the company works to dispel doubts and reinforce confidence in its accounting and operational transparency. While the stock has yet to recover all of its recent losses, the immediate uptick reflects the market’s positive reception to the management’s detailed explanation.
As Kaynes continues to navigate scrutiny and expand its strategic capabilities in the EMS and smart metering segments, investors will be watching closely to see whether the clarification translates into sustained market recovery.
The stock traded at ₹4,033 on the BSE at 11.06 am, higher by 6.14 per cent, hitting an intraday high of ₹4,065 against the previous close of ₹3799.60.
Published on December 9, 2025
