Mysuru-based electronics system design and manufacturing firm, Kaynes Technology, faced a challenging day on the bourses after reporting a significant 21.5% drop in net profit for the fourth quarter. Despite a robust 26% increase in operating revenue, which climbed to ₹1,242 crore, the bottom line was pressured by a sharp rise in internal expenditures.
The company reported a quarterly profit of ₹91.2 crore, falling short of analyst expectations. This decline is largely attributed to a triple threat of rising costs: raw material expenses rose by 27%, employee costs surged by a staggering 95%, and tax outflows jumped 90% compared to the previous year. These headwinds resulted in the operating margin shrinking by 150 basis points, settling at 15.6%.
The market reaction was swift and severe, with shares plummeting nearly 20% to trade around ₹3,370 on the BSE. The steep sell-off prompted several brokerages to downgrade the stock, citing the earnings miss and margin compression.
However, leadership remains optimistic about the long-term horizon. Executive Vice Chairman Ramesh Kunhikannan highlighted the rapid scaling of the company’s OSAT (Outsourced Semiconductor Assembly and Test) unit, which commenced commercial operations just 14 months after groundbreaking. Furthermore, the HDI PCB manufacturing unit is nearing readiness, which the company believes will improve execution visibility and support future growth. While Kaynes continues to report strong customer engagement and demand visibility across strategic sectors, the immediate focus for investors remains the company’s ability to manage escalating operational costs in an increasingly competitive electronics manufacturing landscape.
