Kaynes Tech stock dives 40% as focus shifts from smart meters

Kaynes Technology India Ltd has seen its stock slide about 40% in a month as investors digest growth prospects and capital-management signals. A leading broker lowered its target price to Rs 5,455 from Rs 8,478, saying the recent weakness stems more from disclosure and execution issues than from corporate governance. The brokerage suggests investors reassess the company's growth story, particularly around its smart-meter business.

Smart meters have been a drag on cash flow, with working capital pressures prominent. The broker estimates the smart-meter revenue share could fall from about 30% in the first half of FY26 to 17% in the second half, and to around 11% by FY28 if current trends persist. To offset this, the broker expects a meaningful step-up in growth from other segments such as automotive, railways, and aerospace. Management has indicated that Kaynes will shift from being a service provider in smart meters to simply supplying devices with improved collection terms, and it does not anticipate any equity funding for ongoing OSAT and PCB projects in the near term.

Other notable points include a commitment to normalising working capital, with management saying improvement should be visible going ahead. The firm will also seek external advisory input to address the disclosure gaps that have drawn investor concern. While the smart-meter story is being recalibrated, the broker notes that improvements in cash flow and stronger contributions from non-smart-meter segments could provide an upside path over the next few quarters.

Investors are now awaiting the next update for more clarity on capital allocation and the pace of operational improvements, which could determine whether the stock can regain some momentum from here.

Cover image source: Kaynes Technology shares resume losing run, fall 6%; here's why 🔗

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