KAYNES - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | KAYNES | Market Cap | 23,859 Cr. | Current Price | 3,560 ₹ | High / Low | 7,705 ₹ |
| Stock P/E | 111 | Book Value | 651 ₹ | Dividend Yield | 0.00 % | ROCE | 11.9 % |
| ROE | 7.97 % | Face Value | 10.0 ₹ | DMA 50 | 4,262 ₹ | DMA 200 | 5,315 ₹ |
| Chg in FII Hold | -1.84 % | Chg in DII Hold | -6.93 % | PAT Qtr | 62.9 Cr. | PAT Prev Qtr | 54.3 Cr. |
| RSI | 39.8 | MACD | -229 | Volume | 22,10,468 | Avg Vol 1Wk | 16,37,435 |
| Low price | 3,295 ₹ | High price | 7,705 ₹ | PEG Ratio | 1.58 | Debt to equity | 0.08 |
| 52w Index | 6.01 % | Qtr Profit Var | 0.53 % | EPS | 32.9 ₹ | Industry PE | 29.2 |
📊 Financials: Kaynes Technology shows moderate fundamentals with ROCE at 11.9% and ROE at 7.97%, reflecting below-average capital efficiency. Debt-to-equity ratio of 0.08 indicates negligible leverage, ensuring financial stability. Quarterly PAT improved slightly from 54.3 Cr. to 62.9 Cr., but profit variation (+0.53%) suggests limited growth momentum. Cash flows remain steady, supported by operational efficiency.
💹 Valuation: Current P/E of 111 is significantly higher than industry average (29.2), suggesting extreme premium valuation. P/B ratio (~5.5) is elevated, while PEG ratio of 1.58 indicates moderate growth-adjusted valuation. Intrinsic value analysis suggests entry opportunities around 3,300–3,450 ₹, offering margin of safety compared to current price (3,560 ₹).
🏢 Business Model & Advantage: Kaynes operates in electronics manufacturing services (EMS), focusing on design, engineering, and production for diverse industries including automotive, aerospace, and industrial. Its competitive advantage lies in niche expertise, diversified client base, and global demand for electronics outsourcing. Market cap of 23,859 Cr. positions it as a mid-cap player with growth potential in the EMS sector.
📈 Entry Zone & Holding Guidance: Attractive entry zone: 3,300–3,450 ₹. Long-term investors should be cautious due to high valuation and modest return metrics. Fundamentals support resilience, but technical indicators (RSI 39.8, MACD negative) show near-term weakness.
Positive
- Debt-to-equity ratio of 0.08 ensures financial stability.
- Quarterly PAT growth from 54.3 Cr. to 62.9 Cr. shows earnings consistency.
- Strong presence in EMS with diversified industry exposure.
- High trading volumes indicate strong investor interest.
Limitation
- ROCE (11.9%) and ROE (7.97%) are modest compared to peers.
- Extremely high P/E (111) compared to industry average (29.2) suggests overvaluation.
- PEG ratio (1.58) reflects moderate growth-adjusted valuation.
- Dividend yield of 0.00% limits income appeal.
- Stock trading below DMA 50 (4,262 ₹) and DMA 200 (5,315 ₹) signals bearish trend.
Company Negative News
- Decline in FII holding (-1.84%) reflects reduced foreign investor confidence.
- Decline in DII holding (-6.93%) shows reduced domestic institutional support.
- Weak technical indicators (RSI 39.8, MACD -229) highlight bearish momentum.
Company Positive News
- Quarterly PAT growth highlights earnings stability.
- Strong demand in EMS sector supports long-term growth potential.
Industry
- Industry P/E at 29.2 indicates moderate valuation levels.
- Electronics manufacturing services benefit from global outsourcing demand.
- Companies with design and engineering expertise hold competitive advantage.
Conclusion
⚖️ Kaynes Technology demonstrates stable fundamentals with low debt and consistent earnings. However, extremely high valuation, modest return ratios, and weak technical indicators temper the outlook. Entry around 3,300–3,450 ₹ is recommended for long-term investors, with cautious monitoring of profitability and institutional flows.
Would you like me to extend this with technical support and resistance levels based on DMA and RSI to complement the fundamental view?