Apr'25 View on KFin Technologies Ltd

KFin Technologies Limited is a leading technology-driven financial services platform. The company provides services and solutions to asset managers and corporate issuers across asset classes in India and provides several investor solutions including transaction origination and processing for mutual funds and private retirement schemes in Malaysia, the Philippines and Hong Kong. Q3 result Analysis and its impact • Kfin delivered strong results in 3QFY25, with 35% earnings growth, helped by 33% yoy revenue growth. • MF RTA: Stable market share and slight uptick in yields. • Non-MF: Strong growth in issuer solutions and international/alternatives with strong deal wins. • Kfin’s progress toward a diversified offering across products, asset classes and geographies is tracking well. • Retain SELL with an FV of Rs1,000 (Rs920 earlier). Q3FY25 Earnings Update: Positives: • MF RTA revenues grew 38% yoy and 5% qoq. • The non-MF revenue growth was 22% yoy. • EBIT margins were stable yoy/qoq at 39%. Negatives: • Credit cost increased sharply by ~45 bps qoq to 2.1% of advances • We like the execution but find valuations to be a constraint.