Kaynes Tech Shares Crash 12% as JPMorgan Warns Against ‘Bottom Fishing’; Kotak Flags Disclosure Mismatches

Shares of Kaynes Technology India extended their sharp fall for the second straight session on December 5, plunging more than 12% after Kotak Institutional Equities raised serious concerns over inconsistencies in the company’s related-party transaction disclosures. The concerns, combined with market sentiment, triggered aggressive selling pressure, pushing the stock to its lowest levels in nearly eight months.

Adding to the bearish outlook, JPMorgan advised investors to avoid bottom fishing, further intensifying worries around the stock’s near-term prospects.

Stock Falls Over 12%; Extends Two-Day Selloff

Kaynes Tech shares closed at ₹4,365 apiece on December 5.
During the day, the stock fell more than 13%, hitting an intraday low of ₹4,311, which marks the lowest price level for the stock in almost eight months.

The company has now lost nearly 17% in just two sessions after Kotak highlighted alleged irregularities in its disclosures.
This steep two-day decline follows an already weak performance over recent weeks, amplifying investor concerns.

Kotak Flags Mismatches in Related-Party Disclosures

In a detailed research note, Kotak Institutional Equities reported identifying multiple mismatches across the disclosures made by:

• Kaynes Technology,

• Kaynes Electronics Manufacturing, and

• Its subsidiary Iskraemeco,

for the financial year 2025.

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Key discrepancies highlighted by Kotak:

1. Unmatched Purchase Transactions:

   • Kotak noted that Iskraemeco’s filings reported purchases of ₹180 crore from Kaynes Electronics Manufacturing.

   • However, this did not appear in the related-party disclosures of Kaynes Electronics Manufacturing itself.

2. Missing Cross-Company Balances:
   According to Kotak, Iskraemeco reported:

   • ₹320 crore in year-end payables to Kaynes Technology

   • ₹180 crore in payables to Kaynes Electronics Manufacturing

   • ₹190 crore in receivables from Kaynes Technology

   These balances did not show up in the corresponding disclosures of Kaynes Technology or Kaynes Electronics Manufacturing.

3. Receivables Concentration:
   Kotak added that almost all of Iskraemeco’s current receivables were shown as due from its parent company, including ₹45.8 crore outstanding for more than a year.

The brokerage said the inconsistencies require closer scrutiny, as they raise concerns around inter-company transactions and year-end balances within the group.

Kaynes Tech Issues Clarification

Kaynes Technology issued an official clarification on December 5, acknowledging that some related-party transactions were inadvertently not disclosed in the standalone financial statements.

The company stated:

• The omissions have now been rectified

• It has been noted for future compliance

• The transactions were already part of the overall financial statements for both entities

This clarification came after Kotak highlighted the mismatches, but market reaction remained sharply negative through the trading session.

JPMorgan Advises Investors to Avoid Catching the Falling Knife

According to CNBC-TV18, JPMorgan has urged investors to avoid “bottom fishing” in Kaynes Technology shares.
The brokerage believes the stock lacks a clear, strong catalyst until the company reports its Q3 results, making it risky for investors attempting to identify a price bottom.

Yet, despite the caution, JPMorgan continues to maintain an ‘Overweight’ rating on the stock.

JPMorgan’s Target: ₹7,550

• JPMorgan has set a target price of ₹7,550 per share

• This implies an upside of nearly 52% from the previous closing price

Concerns Raised by JPMorgan:

The brokerage highlighted multiple challenges:

• Balance sheet concerns

• Cash flow issues, including questions on cash generation

• Revenue growth uncertainties, excluding contributions from smart meters

• The stock has been falling consistently after its Q2 results

• Sentiment—not fundamentals—appears to be driving the continued decline

JPMorgan added that it is difficult to predict the stock’s bottom, given the lack of change in guidance or fundamentals.

Kaynes Tech Share Price Performance

The stock has seen a prolonged correction over various timeframes:

• Down ~21% in the past five days

• Down 31% over the past month

• Down 23% in the last six months

• Down more than 42% in 2025 so far

The stock’s P/E ratio currently stands at over 105, indicating a premium valuation that may have intensified the reaction to disclosure-related concerns.

Market Reaction & Outlook

The sharp selloff reflects a combination of:

• Disclosure-related concerns raised by Kotak

• Negative sentiment reinforced by JPMorgan’s caution

• The stock’s already steep valuation

• Weakness in recent earnings performance

With both domestic and global brokerages raising red flags, investors appear to be reassessing the risk-reward profile of Kaynes Technology.

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