Why did Kaynes Technology crash 8% today? Here’s what went wrong

Synopsis: Shares of one of leading ems and semiconductor firm saw volatility after QoQ revenue fall of 11 percent, while the profits fell by 36 percent. The company’s CFO has even revised from the previously FY26 revenue of RS 4,400 to Rs 4,100 crore.

On Friday the shares of Kaynes Technology, a leading integrated electronics manufacturing company were in the spotlight as Q3FY26 numbers saw a fall, following which there occurred guidance reiteration from the board and brokerage,s leading the stock to tumble.

With a market cap of Rs 24,240 Cr, Kaynes Technology India Ltd saw its stock hit an intraday low of Rs 3340 which is 8 percent lower than the previous close of Rs 3614, but the company’s stock has given a compounded return of 59 percent in the last three years.

Q3FY26 Result

In the latest quarterly result the company has seen its revenue from operations increase by 22 percent YoY, from Rs 661 Cr in Q3FY25 to Rs 804 Cr in Q3FY26 and the net profits growth on YoY basis stood at 17 percent going from Rs 66 Cr in Q3FY25 to Rs 77 Cr in Q3FY26

But what actually matters in the context of a company like Kaynes Technology is looking into the company’s QoQ movement, where we get to realise that it has seen its revenue fall by 11 percent from Rs 14,051 Cr, and a net profit fall of 36 percent on QoQ basis. 

In 9M numbers of the fiscal year, the company saw its revenue from operations increase by 37 percent YoY, from Rs 1737 Cr in 9MFY25 to Rs 2383 Cr in 9MFY26. The net profits for the same period grew by 53 percent going from Rs 177 Cr to Rs 272 Cr.

The company has a 3 year sales CAGR of 57 percent, while the TTM has fallen to 42 percent. The company’s 3 year profit CAGR is at 90 percent, while the TTM number is at 51 percent. The company also has a ROCE of 14 percent and a ROE of 11 percent.

What went wrong?

The company has earlier given a guidance of Rs 1,300 crore sales in Q3FY26 but when we look at actual sales generated, the company has been able to generate only 60 percent of this in the latest quarter, due to slowdown high competition and pricing issues.

The company also saw its EBITDA margin for the quarter expanded only by 60 basis points to 14.8 percent, well below expectations of a 160 basis points expansion in margins to 15.8 percent. Margins also declined on a sequential basis, due to the steep discounts given by Chinese component manufacturers due to the decline in US tariffs. They also saw their net working Capital Days  increase from 107 in 9MFY25 to 139 in 9MFY26.

Possible Benefits in Future

Looking into the macro level we can tell that Kaynes Technology is set to benefit from the Union Budget’s Rs 40,000-crore electronics component scheme mainly because the company gets a majority of its revenue from the OEM–Turnkey PCBA segment, which heavily relies on semiconductor components.

This scheme could boost domestic manufacturing, strengthen semiconductor ecosystems, and reduce import dependence. Added incentives, logistics reforms, and tax exemptions can lower costs, improve margins, expand order books, and enhance global competitiveness for EMS players like Kaynes.

Brokerage Views

JPMorgan maintained an Overweight rating on Kaynes Technology with a target price of Rs 6,100, even as Q3 results missed estimates on revenue and margins. Brokerage says that even though the revenue grew 22 percent YoY but fell short of expectations, while the EBITDA margin stood at 14.8 percent due to a lower share of high-margin ODM mix. Additionally, it highlighted robust Automotive performance and strong order book growth of about 50 percent YoY, which is at Rs 9072 Cr as of Q3FY26, though Industrial and Railways remained weak, the broker also noted rising working capital days as a key monitorable.

Jefferies reiterated a Buy rating on Kaynes Technology with a target price of Rs 5,940 despite an all-round Q3 miss versus estimates. Sales and profit growth slowed compared to H1FY26, operating margin came in at 14.8 percent, and Industrial sales declined around 5 percent YoY. However, the order book rose 12 percent sequentially to roughly Rs 9,100 crore, indicating healthy demand visibility, while higher working capital and net debt were flagged as balance-sheet pressures to watch.

Management’s view

Post the announcement of Q3FY26 result, the company CFO stated that the revenue guidance for Q4 stands at Rs 1,700 crore, while FY26 revenue guidance has been revised from the previously given RS 4,400 to Rs 4,100 crore. The company expects 16 percent EBITDA margins, Rs 1,700 crore Q4 growth, standalone operating cash flow positivity, and consolidated cash flow positivity by FY26-end.  Additionally, he also mentioned that the company is still sticking to the FY28 Sales Target Of $1 Billion

Kaynes Technology India Ltd, founded in 1988 and headquartered in Mysore, is an integrated electronics manufacturing services company. It provides conceptual design, engineering, manufacturing, and lifecycle support for sectors such as automotive, aerospace, defence, medical, railways, and IT, offering end-to-end solutions from prototyping to mass production.

As of 9MFY26, Kaynes Technology’s revenue mix was led by the OEM–Turnkey PCBA segment, contributing 51 percent of total revenue. This was followed by ODM & Product Engineering and IoT solutions, which accounted for 27 percent, while the OEM–Turnkey Box Build segment made up the remaining 22 percent, reflecting a strong tilt toward high-value electronics manufacturing services.

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