Share Price of Kaynes Technology Declines 19% Following FY25 Revenue Guidance from Management

Shares of Kaynes Technology plummeted more than 19% on January 28, 2025, after the company announced a downward revision to its FY25 revenue guidance. The company now projects revenue of ₹2,800 crore for FY25, down from the previously estimated ₹3,000 crore. Despite the revised guidance, Kaynes Technology reported strong growth in Q3 FY25 profits and revenues.

Kaynes Technology Share Price Performance

The company’s share price opened at ₹4,877 on the Bombay Stock Exchange (BSE), touching an intraday high of ₹4,917.45 and a low of ₹4,256.65 before stabilizing. The sharp decline reflects investor concerns over the revised revenue outlook and execution delays that impacted Q3 performance.

What Led to the Guidance Revision?

Kaynes Technology’s management cited execution delays in the industrials segment as the key reason for revising its FY25 revenue forecast. These delays prevented the completion of orders worth ₹100 crore during the December quarter.

However, the company expressed optimism about fulfilling these orders in the current quarter and anticipates significant growth for FY26, projecting revenue of ₹4,500 crore with margins exceeding 15%.

Q3 FY25 Financial Highlights

Despite the revenue guidance cut, Kaynes Technology delivered impressive Q3 FY25 results:

• Revenue: ₹661.2 crore, a 30% increase from ₹509.3 crore in Q3 FY24.
• EBITDA (Excluding Other Income): ₹94 crore, a 35% increase YoY from ₹69.9 crore.
• EBITDA Margin: Improved to 14.2%, up 50 basis points from 13.7% in Q3 FY24.
• Profit After Tax (PAT): ₹66.5 crore, a 47% YoY jump.
• PAT Margin: Rose to 10.1%, a 120-basis-point increase from 8.9% in the same period last year.

The company’s strong profit margins underscore its ability to maintain operational efficiency despite challenges.

Management’s Statement on Growth and Investments

Ramesh Kunhikannan, Managing Director and Promoter of Kaynes Technology emphasized the company’s continued focus on high-potential, high-margin segments. He stated:

“Kaynes achieved an impressive 30% revenue YoY growth in Q3FY25 with healthy profit margins. Our revenues were ₹17,373 mn for the 9 months ended December 31, 2024, as against ₹11,673 mn for the 9 months ended December 31, 2023, establishing a growth of 49%. Our order book stood at ₹60,471 million as of December 31, 2024, providing strong revenue visibility for FY25 and beyond.

The net working capital cycle has improved to 107 days during the current quarter, compared to Q3 FY24, where it was 117 days. We continue to invest in high potential & high margin segments and expect these to help us sustain the growth momentum and make Kaynes a differentiated player in this segment.”

Investor Concerns Over Execution and Outlook

Despite strong Q3 results, the reduction in FY25 revenue guidance and execution delays raised investor concerns. The market reaction indicates that while the company’s long-term outlook remains positive, near-term challenges could affect performance.

Summary

Kaynes Technology reported stellar Q3 FY25 results with significant revenue and profit growth. However, the management’s decision to revise FY25 revenue guidance to ₹2,800 crore due to execution delays led to a sharp decline in the company’s share price.

The company’s strong order book improved working capital cycle, and ambitious FY26 revenue projection of ₹4,500 crore provides a promising outlook. However, investors are likely to monitor the timely execution of pending orders and the company’s ability to achieve its growth targets.