Kaynes Technology has remained one of the most closely watched companies over the past three quarters. Every quarterly result has brought new developments, whether in revenue guidance, cash flow, capital expenditure, or long-term business expectations. As a result, investor sentiment has shifted significantly from quarter to quarter.
While the company’s long-term business opportunity remains attractive, repeated changes in guidance and financial expectations have created uncertainty among investors. Therefore, the upcoming Q1 FY27 results have become one of the most important quarterly events for the company.
This article reviews the events of the past three quarters, discusses what went wrong, explains the key hurdle behind the negative cash flow, and highlights the major factors investors should monitor during the Q1 FY27 results.
Past Quarterly Analysis
Q2 FY25 – Kotak Institutional Equities Report
The second quarter became one of the most difficult periods for Kaynes Technology after the Kotak Institutional Equities report affected investor sentiment.
Following the report, the company’s share price corrected sharply. The stock declined from nearly ₹7,700 in October to around ₹3,765 by December, representing a correction of more than 50%.
According to the management, the market reaction was primarily driven by misconceptions regarding the company’s accounting policies and alleged irregularities. Management clarified its accounting practices and explained that the concerns did not accurately represent the business.
After these explanations, many investors believed that the worst phase had passed and expected the business to stabilize in the coming quarters.
Q3 FY26 – Revenue Guidance Trimmed
However, the third quarter brought another surprise.
Earlier, management had guided for annual revenue of approximately ₹4,500 crore. During Q3, this guidance was revised downward to nearly ₹4,000 crore.
Although the company reduced its revenue expectations, management continued expressing confidence in the business.
Management stated that FY26 would remain a strong year and expected annual revenue of nearly ₹3,700 crore.
The company also remained optimistic regarding its future growth businesses.
For the OSAT business, management projected revenue of nearly ₹1,500 crore by FY27.
Similarly, the PCB business was expected to contribute nearly ₹1,000 crore by FY27.
These projections strengthened confidence that the temporary challenges would not affect the company’s long-term growth.
Q4 FY26 – The Biggest Surprise
The fourth quarter completely changed market expectations.
Despite expressing confidence throughout the year, the company missed even its revised guidance.
Instead of achieving the expected revenue levels, the company reported annual revenue of approximately ₹3,626 crore.
The disappointment was not limited to revenue.
The company reported nearly ₹600 crore of negative cash flow during FY26.
Earlier, during the Q3 earnings call, management had indicated that cash flow would remain only slightly negative.
Therefore, the reported cash flow came as a major surprise.
Following the results, the stock declined nearly 25% in a single trading session.
The company also revised its future expectations for both OSAT and PCB businesses.
The OSAT revenue expectation was reduced from nearly ₹1,500 crore to around ₹250-300 crore for FY27.
Similarly, the PCB revenue expectation was reduced from nearly ₹1,000 crore to only ₹300-400 crore.
These revisions surprised investors because they represented a significant change from the confidence shown just one quarter earlier.
Although analysts repeatedly questioned management regarding future revenue expectations, the company did not provide detailed explanations for the revisions.
Instead, management highlighted its long-term objective of achieving approximately USD 1 billion in revenue by FY28.
| Segment | FY26 Actual/Guided | Forward Target | Timeframe |
| EMS (ex-metering) | ~40% YoY (9M) | 2x industry rate (~30%+) | Ongoing |
| OSAT | ₹250–300 cr | ₹1,500 cr (minimum) | Real ramp from FY27 |
| PCB | ₹300–400 cr | ₹1,000 cr (minimum) | Real ramp from FY27 (plant live July’26) |
| Metering | ₹700–800 cr | ~30% YoY | Model shift to device-only |
| Total Company | ₹3,626 cr (FY26) | $1 billion (~₹8,300+ cr) | FY28 |
What Went Wrong?
The biggest issue was not simply weaker financial performance.
The major concern was the repeated change in management guidance.
Over the last three quarters, investors witnessed:
• Multiple revenue guidance revisions.
• Significant changes in business projections.
• Unexpected negative cash flow.
• Reduced expectations for OSAT.
• Reduced expectations for PCB.
Because of these repeated revisions, investors became uncertain regarding future execution.
Key Hurdle – Smart Meter Business & Cash Flow
During the Q4 earnings call, analysts questioned management regarding the nearly ₹600 crore negative cash flow.
Management explained that the primary reason was the Smart Meter business.
According to the company, the Smart Meter business operates as an integrated ecosystem where the company manufactures smart meters while also providing servers, installation, and related services.
Since this business is largely dependent on government projects, payments depend upon government receivables.
Management stated that government payment delays resulted in significantly higher receivables.
Consequently, operating cash flow deteriorated sharply.
Management also admitted that the working capital requirement of the Smart Meter business turned out to be much higher than originally expected.
However, this explanation raised further questions.
If the business inherently requires higher working capital, investors questioned why management had not anticipated this while providing earlier guidance.
The rise in receivables ultimately became the major reason behind the nearly ₹600 crore negative cash flow reported during FY26.
What to Expect in Q1 FY27
The upcoming quarter has become one of the most important results for Kaynes Technology.
The focus will not only remain on quarterly revenue and profitability but also on management commentary.
Investors are expected to closely monitor:
• Revenue growth.
• Operating performance.
• Working capital.
• Cash flow generation.
• Smart Meter business performance.
• Government receivable collections.
• OSAT business progress.
• PCB business progress.
• Future revenue guidance.
Management has already stated that production has commenced at the OSAT facility.
Therefore, commentary regarding the commercialization and revenue contribution of the OSAT business will remain important.
Another key factor is valuation.
Following the sharp correction from around ₹8,000 to nearly ₹3,800, the company’s valuation has reduced significantly.
Compared with peers, the valuation appears much lower than previous levels.
However, future stock performance will depend primarily on management execution.
The market expects consistency in guidance without further negative surprises.
If working capital improves and receivables normalize, cash flow is also expected to improve.
The company is still in its expansion phase.
The first phase of the OSAT facility involving nearly ₹1,700 crore of capital expenditure has already been completed.
The overall planned investment is expected to reach nearly ₹3,400 crore.
Therefore, investors will closely monitor management’s cash flow guidance and capital allocation strategy.
Over the past three quarters, Kaynes Technology has experienced significant changes in guidance, revenue expectations, cash flow, and long-term business projections.
The repeated revisions created uncertainty despite the company’s confidence in its long-term opportunities.
As a result, Q1 FY27 has become an important quarter for investors.
Beyond the quarterly financial numbers, management commentary regarding working capital, Smart Meter receivables, OSAT execution, PCB progress, and future revenue guidance will remain the key factors determining investor confidence going forward.