Synopsis:- A semiconductor manufacturer saw sharp value erosion after governance concerns and a major lock-in expiry pressured the stock, though it has since rebounded. Despite volatility, analysts see strong long-term potential driven by OSAT and PCB expansion, PLI benefits, global partnerships, and ambitious FY30 growth targets.
India’s semiconductor sector is accelerating on policy push and demand, with a market size around US$45–50 billion by 2025 and a path to US$100–110 billion by 2030. The Rs 76,000 crore Semicon India program anchors fabs and ATMP units, led by Tata-PSMC and Micron, catalysing jobs and supply-chain depth as electronics output nears Rs 9.8 lakh crore in 2024.
Kaynes Technology’s stock has plunged nearly 50% over the past two months, erasing about Rs 25,000 crore in market value. However, the shares rebounded sharply today, rising 15% to Rs 4,356, lifting its market capitalisation to Rs 29,062.87 crore, signalling a partial recovery amid renewed investor interest.
Recently, Kotak Institutional Equities flagged discrepancies in related-party and inter-company transaction disclosures between the company and its subsidiaries, raising questions around capex recognition and cash-flow clarity. Sentiment was further hit in November when a major shareholder lock-in expired, releasing nearly 20% of equity and creating supply pressure that triggered a sharp intraday decline.
Brokerage Recommendations
However, Macquarie has reiterated its “outperform” rating on the semiconductor stock, setting a target price of Rs 7,700, implying a strong 102% upside from the previous close of Rs 3,799.60. The brokerage’s continued confidence signals expectations of robust growth potential and improving fundamentals despite recent volatility in the sector.
Macquarie noted that during the analyst call, management acknowledged disclosure lapses but firmly denied any wrongdoing. While the clarifications were viewed as reasonable, the brokerage said multiple concerns raised around governance and transparency have “muddied the waters,” leaving investors cautious despite management’s attempt to address the issues.
Macquarie noted that the company has addressed the disclosure issue, identified its root cause, and introduced automated related-party checks to strengthen internal controls. Updates on OSAT and PCB manufacturing, PLI-linked developments, new partnerships, and international M&A opportunities are expected to enhance growth visibility and expand the company’s total addressable market.
Macquarie highlighted key catalysts such as OSAT and PCB expansion, PLI-linked opportunities, new partnerships, and global M&A prospects. It noted the company’s push toward higher value addition, international growth, and backward integration, positioning it to emerge as a leading ESDM player in India.
Kaynes Tech enjoys broad analyst coverage, with 14 of 26 firms recommending a “buy,” eight suggesting “hold,” and four advising “sell.” Despite recent volatility, consensus price targets signal a potential upside. Macquarie’s target ranks sixth highest, trailing ICICI Direct, Nomura, Motilal Oswal, IIFL, and Jefferies, reflecting sustained confidence in the company’s long-term growth outlook.
FY30 Guidance
Kaynes Technology aims to achieve $2 billion in revenue by FY30, driven by growth in its OSAT and printed circuit board businesses. The OSAT segment targets Rs 4,500 crore, while the PC Board unit expects Rs 2,500 crore, highlighting ambitious expansion plans.
To support this growth, Kaynes has a total CapEx of Rs 3,400 crore for its OSAT business, with 70% funded via government subsidies and the rest from internal investment. So far, Rs 200–300 crore has been spent, with another Rs 600–700 crore expected in FY26, underlining a phased approach to capacity building and scaling operations.
Kaynes Technology India is a leading end-to-end electronics manufacturing and IoT solutions provider, serving industries like automotive, aerospace, healthcare, and industrial automation. With strong design, manufacturing, and R&D capabilities, it focuses on innovation, global expansion, and advanced technologies such as OSAT, smart devices, and embedded systems to drive sustainable growth.
Conclusion
Kaynes Technology faces governance concerns and recent market volatility, yet long-term growth drivers remain intact. Macquarie’s optimism rests on expanding OSAT and PCB capabilities, PLI-linked benefits, and global partnerships. If execution improves and disclosures strengthen, the company may regain investor confidence and realise its ambitious FY30 targets, though risks cannot be ruled out.
Written by Abhishek Singh
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