Kaynes Technology India shares witnessed significant selling pressure, declining 6.5% in what marked the stock's steepest single-day fall in nearly a month. The sharp decline also ended the stock's two-day gaining streak, highlighting increased volatility in the counter.

Stock Performance and Trading Activity

The stock performance and key trading metrics for the session are detailed below:

The trading session saw significantly muted volumes, with only 8 lakh shares changing hands compared to the 20-day average of 36 lakh shares. This low volume activity preceded the sharp decline, indicating reduced investor participation.

Analyst Coverage and Price Target Revision

Despite the stock's poor performance, brokerage firm Jefferies maintained its optimistic stance on the company. However, the firm made substantial adjustments to its valuation metrics:

The revised price target of ₹5,940 represents a significant reduction from the earlier target of ₹7,780, though it still implies a substantial 55% upside potential from current trading levels.

Management Commentary and Strategic Outlook

In a December 18 interaction with CNBC-TV18, CFO Jairam Sampath provided insights into the company's strategic direction. Key highlights from his commentary included:

• The Mitsui deal is expected to bring significant value to the company
• Smart metering business contribution will decrease as other segments expand
• Company remains well-positioned to meet earlier guidance
• Management may consider dividend distribution next year as a confidence-building measure

Broader Market Context and Peer Performance

The decline in Kaynes Technology shares coincided with weakness across the broader EMS (Electronics Manufacturing Services) sector. Other major players in the space also witnessed selling pressure:

• Amber Enterprises: Declined 1-2%
• Dixon Technologies: Fell 1-2%

This sector-wide weakness suggests broader concerns affecting the electronics manufacturing space rather than company-specific issues.

Analyst Consensus and Market Sentiment

The stock maintains diverse analyst coverage with mixed recommendations across the investment community:

The analyst consensus shows a slight bias toward positive recommendations, with 14 out of 26 analysts maintaining buy ratings. However, the significant price target reduction by Jefferies may prompt other analysts to reassess their valuations and recommendations in upcoming reports.

The Electronics Component Production-Linked Incentive (PLI) scheme has witnessed significant policy developments as the government balances investment attraction with strategic oversight. Union Electronics and IT Minister Ashwini Vaishnaw has intensified monitoring requirements while MeitY signals openness to compliant Chinese investments, marking a pragmatic approach to India's electronics manufacturing ambitions with 2026 emerging as a critical semiconductor milestone.

Government's Stance on Chinese Investment

In an exclusive interview with CNBC-TV18, MeitY Secretary S Krishnan clarified the government's position on Chinese participation in the Electronics Component PLI scheme. The ministry confirmed that Chinese investments fully complying with India's foreign direct investment norms are eligible for PLI benefits, with no blanket exclusion policy in place.

This "light-touch" approach ensures proposals are evaluated based on regulatory compliance and security considerations rather than origin-based rejection, reflecting the government's intent to strengthen domestic electronics manufacturing while maintaining strategic safeguards.

Enhanced PLI Scheme Requirements and Monitoring

Addressing the electronics component industry, Minister Vaishnaw outlined stringent new expectations for PLI participants. Companies must build and strengthen design teams within India while reducing import dependence through higher levels of local sourcing. The minister emphasized adherence to Six Sigma quality standards to maintain global competitiveness.

The government's commitment to oversight is evident in Vaishnaw's announcement that progress will be closely tracked through daily review calls from his office, ensuring companies meet their timelines and commitments.

PLI Scheme Progress and Investment

The Electronics Component PLI scheme has gained significant momentum with substantial approvals and investments:

These approvals target domestic value chains for critical components including camera modules, display modules, printed circuit boards, and optical transceivers while boosting export competitiveness.

2026: Semiconductor Manufacturing Milestone

Vaishnaw highlighted 2026 as a pivotal year for India's semiconductor ambitions, with four major semiconductor units expected to begin commercial production:

This timeline represents a major milestone in establishing India's domestic chip manufacturing ecosystem and reducing dependence on imports. The electronics manufacturing sector continues its rapid expansion, currently employing approximately 25.00 lakh people across various segments, with mobile manufacturing alone accounting for 14.00-15.00 lakh jobs.