Jefferies sees 26% upside potential in KFin Technologies shares and maintains ‘Buy’ rating with a target price of Rs 570 following the strong second quarter performance of the company. KFin Tech posted a 28% growth in its profit after tax (PAT) at Rs 61.4 crore for the second-quarter of FY24. “We see 18% Cagr in profit for K-Fin over next three years. K-Fin also generates high surplus and has been pragmatic with acquisitions. Hence, K-Fin may be a higher-growth EM peer for Indian and global platforms like CAMS, SS&C, JTC Group, Vistra, CITCO, CSC and Apex Group. We maintain our ‘Buy’ call with revised price target of Rs 570 (560 earlier) based on 33x Sep-25 PE, said Jefferies in its report.
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K-Fin on Friday, reported 28% YoY growth in earnings aided by 16% growth in revenues and some margin expansion. Growth in revenues was led by 16% growth in domestic MF solutions and 48% in the international segment, whereas global business service lagged with a decline of 22%. The growth in revenues was led by 21% growth in mutual fund AUM, 13% in clients for issuer solutions and strong client wins in international RTA and fund admin segment.
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“We are encouraged by good momentum in new client wins across segments. In the issuer solution segment, K-Fin managed top-3 IPOs and grew its client base. In the international business: In Singapore, it went live with 1 client with 2 more in pipeline; in Thailand, it won a contract with Bank of Ayudhya Public Company, fifth-largest bank in Thailand for fund administration platform; in Malaysia, it has received 2 more LOIs for RTA assignment,” said the report.
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Jefferies however, has cautioned that the potential risks can arise from a tighter cap on MFs, slower ramp-up in new segments, heightened capital market volatility and a pick-up in IT hiring (and pressure on manpower costs). There is also a minor risk of overpaying for an acquisition, but history suggests acquisitions have been at reasonable valuations, said the report. Come from Sports betting site VPbet
