Shares of Kaynes Technology India Ltd extended their losing streak on Friday, falling 11% intradayeven after the company issued a detailed clarification addressing the red flags raised by Kotak Institutional Equities earlier this week. The stock has now lost nearly 17% in just two daysas investors continue to react sharply to concerns around -party disclosure mismatches within the Kaynes group.

Why the stock continues to fall

Despite the company’s explanation, the market remains unconvinced. Kotak’s report highlighted inconsistencies in FY2025 filings between Kaynes Technology, its subsidiary Kaynes Electronics Manufacturingand newly acquired Iskraemec. These discrepancies, particularly involving large inter-company receivables and unmatched -party transactions, have raised governance and transparency concerns.

What Kotak flagged

• ₹1.8 billion in purchases reported by Iskraemeco from Kaynes Electronics Manufacturing did not appear in Kaynes’ own disclosures.


• Iskraemeco’s year-end payables of ₹3.2 billion to Kaynes Technology and ₹1.8 billion to its subsidiary were not mirrored in Kaynes’ filings.


• A large portion of receivables from the parent – including ₹458 million overdue for over a year – raised questions about collection timelines and reporting consistency.

These issues triggered a severe sentiment breakdown, pushing investors to cut exposure despite management’s follow-up statement.

Kaynes Technology may have slipped nearly 25% over the past one monthbut global brokerage JPMorgan is not turning bearish just yet. In its latest note, the brokerage has reiterated its Overweight (OW) rating on the electronics manufacturing company, even as it raises red flags regarding cash flows, receivables, and overall working capital stress.

According to JPMorgan, the stock’s steep underperformance — at a time when the Nifty has gained around 2% — has been driven more by sentiment than fundamentals. The brokerage highlights that revenue expectations and management guidance remain intact since the Q2 results, yet the market has shifted focus sharply toward risks on the balance sheet.

What’s dragging the stock?

JPMorgan lists four key concerns shaping the current downturn:

• Higher-than-expected receivables


• Rising working capital requirements


• Provisions for doubtful debts booked in Q2


• Fears around whether growth beyond smart meters can sustain

The brokerage adds that investor discussions have clearly moved away from celebrating Kaynes’ revenue momentum. Instead, cash flow quality has become the single most critical variable driving valuations.

So why is JPMorgan still Overweight?

Because the long-term fundamentals, it says, remain intact.

JPMorgan believes Kaynes could see a sharp re-rating if the company demonstrates material improvement in cash flows in Q3 and Q4. The brokerage expects the upcoming 3Q earnings to serve as the next major trigger — one that could reset market sentiment if the data aligns.

Analysts will closely track:

• Receivables movement


• Working capital discipline


• Expectation of further provisions


• Cash generation trends

The brokerage also notes that the current slide “does not have a technical bottom yet,” not due to weakening fundamentals but because no near-term positive catalysts exist ahead of the results cycle.

What needs to change for a rally?

JPMorgan is unequivocal:

Kaynes must fix the cash flow narrative.

If receivables begin to ease, working capital stabilises, and operating cash flow improves, the brokerage believes the stock could rebound decisively.