Kaynes Technology has gone from being a market favourite to one of the sharpest underperformers this month. The stock has fallen 25% in just one montha stark contrast to the Nifty’s +2% gain over the same period. With sentiment turning sharply negative, investors are now asking the obvious question: buy, hold or sell?
According to JPMorgan, the sudden reversal in Kaynes’ fortunes isn’t about revenue or guidance — both of which remain unchanged since its second-quarter results. Instead, the market is reacting to concerns around the balance sheet and cash flowsspecifically a spike in receivables, higher working capital needsand provisions for doubtful debts reported in Q2.
The brokerage notes that the market’s focus has now shifted entirely from growth to cash discipline. As a result, even strong topline numbers are unlikely to change investor sentiment unless Kaynes demonstrates visible improvement in receivables and working capitalideally across Q3 and Q4.
JPMorgan also highlighted that the ongoing slide has made it difficult to call a bottom. With no major positive triggers expected before the Q3 earningsthe stock may continue to drift on sentiment alone. For now, many investors are choosing to wait for clarity on cash flows before taking fresh positions.
What could revive the stock?
A clean improvement in operating cash flows, lower receivables pressure and tighter working capital management. These, according to market observers, would be the strongest signals of a turnaround.
Until then, the big question — buy, hold or sell? — will likely hinge on how the company addresses its balance sheet concerns in the coming quarters.
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