Shares of Kaynes Technology tumbled 19.79%, trading at ₹4,226 against the previous close of ₹5,268.95 on the BSE. The decline came after the company revised its FY25 revenue guidance downward, lowering its forecast from ₹3,000 crore to ₹2,800 crore. This unexpected revision has dampened investor sentiment, leading to a sharp sell-off in early trading.
The stock’s market capitalization also took a hit, falling to ₹27,445 crore. The broader market reaction reflects concerns about the company’s growth trajectory amid the lowered revenue expectations.
What Are the Technical Indicators Saying?
- Moving Averages:
Kaynes Technology shares are trading below their 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day moving averages, signaling a bearish trend. - Relative Strength Index (RSI):
The stock’s RSI stands at 30.1, indicating it is neither in the overbought nor oversold zone, but nearing the oversold threshold. - Volatility:
With a one-year beta of 1.6, the stock exhibits high volatility, making it prone to sharp price movements.
Key Financial Performance Highlights
Despite the revenue guidance downgrade, Kaynes Technology posted strong Q3 FY25 results:
- Net Profit: Up 47% YoY to ₹66.5 crore.
- Revenue: Increased 30% YoY to ₹661.2 crore, compared to ₹509.3 crore in Q3 FY24.
- EBITDA: Rose 35% YoY to ₹94 crore, excluding other income.
While these figures reflect robust operational performance, the market appears more focused on the company’s future guidance and growth potential.
What Are Experts Saying?
- Revenue Guidance Revision:
The reduction in FY25 revenue guidance to ₹2,800 crore from ₹3,000 crore has raised concerns about demand weakness or operational challenges. - Valuation Concerns:
Analysts note that the high valuation of Kaynes Technology may have amplified the impact of the guidance downgrade, making the stock more vulnerable to sell-offs. - Bearish Trend:
The breach of key moving averages suggests further downside potential. Investors are advised to wait for signs of stabilization or reversal before considering fresh positions.
What Should Investors Do Now?
- Avoid Fresh Entries:
Given the bearish trend and revenue guidance cut, it’s advisable to avoid new investments until there are signs of recovery or clarity on the company’s growth trajectory. - Monitor Support Levels:
Investors should watch for key support levels around ₹4,000. If the stock breaches this level, it could trigger further downside. - Long-Term Perspective:
For long-term investors, the company’s robust financial performance in Q3 and its expertise in advanced electronic module design may still make it an attractive play, provided the broader fundamentals remain strong.
About Kaynes Technology
Kaynes Technology specializes in the design and manufacturing of advanced electronic modules for a wide range of industries. Its offerings cater to sectors like defense, automotive, and industrial automation, positioning it as a leader in high-tech manufacturing.
Click here to know more.