Kaynes Tech rallies 5% on Nomura's Buy call and PM Modi's upbeat EMS growth target

Upswing in global tech stocks, robust revenue growth key triggers

Rise comes amid a subdued broader market; analysts upbeat on Kaynes' EM strategy

Kaynes Technology India Limited (NSE: KAYNES) shares surged 5.24% to Rs. 651.80 apiece on Tuesday, extending their strong run in recent sessions. The rally was primarily driven by a combination of factors, including a positive research call from Japanese brokerage Nomura and upbeat comments from Prime Minister Narendra Modi on the growth potential of the Electronics Manufacturing Services (EMS) sector in India.

Nomura initiated coverage on Kaynes Tech with a "Buy" rating and a target price of Rs. 750, citing the company's strong execution capabilities, healthy balance sheet, and robust revenue growth prospects. The brokerage highlighted Kaynes' dominance in the Indian EMS industry, with a market share of over 25%, and its potential to benefit from the government's push towards domestic electronics production.

Adding to the positive sentiment, Prime Minister Modi, while addressing the India Mobile Congress 2023, emphasized the government's commitment to developing India as a global hub for electronics manufacturing. He set an ambitious target of achieving $300 billion in EMS revenue by 2026, up from the current $100 billion.

Analysts believe that Kaynes Tech is well-positioned to capitalize on the growing opportunities in the EMS sector. The company has a strong track record of innovation and execution and has been consistently expanding its product portfolio and customer base. Kaynes' strong balance sheet and healthy cash flows provide it with the financial flexibility to invest in capacity expansion and new technologies.

Despite the positive developments, Kaynes Tech's stock performance has been subdued in recent months due to concerns over global economic headwinds and supply chain disruptions. However, the latest rally suggests that investors are growing increasingly confident in the company's long-term growth prospects.

It is important to note that while the Nomura Buy call and PM Modi's upbeat comments provided a boost to Kaynes Tech's stock performance, the company's fundamentals remain the primary driver of its long-term value. Investors are advised to carefully evaluate the company's financial performance, market position, and growth prospects before making any investment decisions.