Kaynes Technology share: Kaynes Technology share price fell over 8% in intra-day deals on Friday, December 5 after multiple brokerages raised red flags over the company’s accounting disclosures, inter-company transactions, and rising working capital pressures.
The electronics manufacturing services (EMS) company came under scrutiny after Kotak Institutional Equities highlighted several inconsistencies in disclosures made by Kaynes Technology, Kaynes Electronics Manufacturing, and its subsidiary Iskraemeco for FY2025.
Kotak said it had identified “multiple mismatches between the disclosures” across the entities, prompting concerns over balance sheet representation and cash flow clarity.
Brokerages Raise Red Flags: Kotak, JPMorgan, and Investec Turn Cautious
JPMorgan urged investors to stay cautious and avoid “bottom fishing” in the stock, noting the absence of near-term catalysts until the third-quarter results. While the global brokerage has maintained its ‘overweight’ rating with a price target of ₹7,550, it emphasised that sentiment—not fundamentals—currently drives the stock.
According to JPMorgan, Kaynes is facing balance sheet pressure, weak cash flows and questions around revenue growth, particularly beyond the smart meter segment. The brokerage pointed out that “investor feedback indicates the company needs to show improvement in its cash flow” before confidence returns. It added that the stock has been sliding since the Q2 results, and “it is difficult to predict when the stock will make a bottom.”
Kotak’s observations were more pointed. The brokerage noted that Kaynes acquired Iskraemeco and Sensonic (54% stake) in FY25 for ₹88.3 crore, recognising goodwill of ₹114 crore. However, the consolidated FY25 balance sheet did not reflect a corresponding goodwill increase, instead showing a net negative adjustment of ₹1 crore and a ₹56.1 crore jump in general reserves.
Management clarified that most of the acquisition consideration was linked to a contract awarded to Iskraemeco and was therefore recognised as an intangible asset, not goodwill. Yet, Kotak highlighted that no additions to intangible assets were recorded and no fair value adjustments were disclosed.
It also pointed to missing cash flow details: the ₹72.5 crore payment (net of contingent consideration) does not appear as a cash outflow.
Kotak further flagged discrepancies in related-party disclosures. Iskraemeco’s filings showed purchases of ₹180 crore from Kaynes Electronics Manufacturing, but this transaction did not appear in the latter’s disclosures. Similarly, Iskraemeco reported year-end payables of ₹320 crore to Kaynes Technology and ₹180 crore to Kaynes Electronics, plus receivables of ₹190 crore from Kaynes Technology—balances that Kotak says do not appear in Kaynes Technology or Kaynes Electronics Manufacturing’s statements.
“These inconsistencies warrant closer scrutiny,” Kotak wrote, warning that the mismatches raise significant questions about inter-company accounting practices. It added that nearly all of Iskraemeco’s receivables were owed by its parent, including ₹45.8 crore outstanding for more than a year.
Investec echoed similar caution, highlighting three major concerns in its review of the FY25 Annual Report and H1FY26 earnings – Weak performance of the core EMS business, with growth led mostly by the acquired Iskraemeco business, elevated working capital stress, and limited progress in OSAT and PCB investments.
Investec noted that debtors more than doubled from ₹570 crore (FY25-end) to ₹1,120 crore at the end of H1FY26, even though revenues remained broadly flat between Q4FY25 and Q2FY26. The company also made a provision of ₹55 crore for doubtful debts—10% of FY25 receivables.
It added that deferred receivables at Iskraemeco remain high at ₹230 crore, down only modestly from the original ₹300+ crore, despite over ₹100 crore being discounted at FY25-end.
Kaynes Technology Stock Under Pressure
Kaynes Technology share fell as much as 8.4% to its day’s low of ₹4560. It is currently trading at its lowest level since April 2025, reflecting the market’s unease over accounting transparency and cash flow visibility. This is the third straight session of loss for the stock, down 15.6% in 3 sessions.
The stock has declined 31% in the past month, sharply underperforming the 2.3% rise in the BSE Sensex during the same period.
From its three-month high of ₹7,705 recorded on October 7, 2025, the stock has now plunged 41%. Meanwhile, it fell 20% in past 6 months and 26% in last 1 year.
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