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On Sunday, CLSA analyst actions led to a change in the stock rating for Kaynes Technology India Ltd (KAYNES:IN). The firm downgraded the company from Outperform to Hold, despite lifting the price target to INR 6,230.00 from INR 5,400.00. The adjustment followed the company’s fourth-quarter earnings report, which indicated strong performance, particularly in terms of margins.
Kaynes Technology’s recent financial results showed a robust fourth quarter, marked by improved margins. However, the growth recorded was marginally lower than CLSA’s projections. Looking ahead, the company has provided an optimistic forecast for fiscal year 2026, expecting a 60% increase in topline revenue along with a 0.5% expansion in margins.
The company’s operating cash flow (OCF) was affected by an increase in working capital requirements. CLSA anticipates that this situation will stabilize over time. The firm also noted Kaynes Technology’s emphasis on developing new business areas, such as Outsourced Semiconductor Assembly and Test (OSAT) services and bare board manufacturing. These segments are expected to start contributing significantly to the company’s financials from the end of fiscal year 2026.
The analyst from CLSA highlighted that the timely completion of these new projects could act as a catalyst for the company’s stock. However, after a significant surge in the stock’s price, the analyst decided to downgrade the rating to Hold. The new price target of INR 6,230.00 represents an upward revision from the previous target of INR 5,400.00, reflecting the firm’s acknowledgment of Kaynes Technology’s strong performance and future prospects.
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