Kaynes Tech can take these measures to restore investor confidence; Macquarie sees 100% upside

Kaynes Technology Ltd. will have to show strong cash flow, organic growth, booking of cash subsidies, and a change of auditors as some of the steps to restore investor confidence, brokerage firm Macquarie wrote in its note on Tuesday, December 9.

Macquarie has maintained its "outperform" rating on Kaynes Tech, with a price target of ₹7,700 per share, which implies a potential upside of 100% from Monday's closing levels. The price target from Macquarie is close to Kaynes Tech's own 52-week high of ₹7,822, from which the stock has already halved.

Kaynes Tech held an analyst call on Monday, where Macquarie said that the management accepted disclosure shortfall, but refuted allegations of shenanigans.

"The management clarification sounded reasonable, but doubts have been raised on so many aspects that water has been muddied," the brokerage wrote.

Kaynes has already corrected the note, identified the root cause, and is implementing software-automated related party contra checks for better internal controls to prevent any repeat, Macquarie's note stated.

OSAT and PCB manufacturing updated, PLI-related news, new JVs and Partnerships, M&A expanding its TAM, particularly internationally are some key catalysts that Macquarie has highlighted.

The note went on to add "Kaynes has set an aggressive path for higher value addition, international expansion, and backward integration that should establish its position as a leading ESDM company in India."

26 analysts have coverage on Kaynes Tech, of which 14 have a "buy" rating, eight have a "hold" rating, while four say "sell."

The consensus estimate of price targets implies a potential upside of 80% from current levels. Macquarie's price target on Kaynes is the sixth highest on the street after ICICI Direct, Nomura, Motilal Oswal, IIFL and Jefferies.

Shares of Kaynes Tech have declined 30% in the last four trading sessions and have halved from their 52-week high.