Shares of KFin Technologies are higher by over 2% on December 18 after Jefferies issued a 'Buy' recommendation and said the company offers a long-term opportunity, assigning a higher target of Rs 1,530 per share. The shares are higher by over 28% in last one month.
Jefferies noted that the domestic business of Kfin Tech has been doing well with a 15-20% revenue growth seen in the medium term. However, the opportunities in the international business appear more exciting as Kfin Tech has been getting licenses to launch operations in the south-east Asian economies, Jefferies added.
On December 18, KFin Technologies said it has joined BlackRock’s 'Aladdin' provider network which makes it solutions for asset managers more standardised and efficient. BlackRock said this enables common clients to connect seamlessly through a single platform, and reducers the risk of errors.
The company also hosted analyst / institutional investors’ meetings on December 17-18 in Dubai and Abu Dhabi, including one with ADIA.
Domestically, KFin Tech has seen a significant expansion of India's wealth management business, as several asset and investment managers have branched out to create their own funds. The company recently handled major IPOs including Bajaj Housing Finance and Hyundai Motor India, and has increased its market share among NSE 500 companies to 48.2% as of September quarter.
Globally too, KFin says it has 'strong potential' for expansion in countries where the company is already present, that is Malaysia, Philippines, Hong Kong, Singapore and Thailand. KFin said its focus has been on offerings that combine transfer agency business as well as fund accounting services for international clients. In the September quarter, KFin Tech's international business rose by 44% on year, and the company said it sees strong demand and an expanding client base.
KFin Tech also has RBI's in-principle nod to set up a wholly-owned subsidiary in Thailand, which it sees as a key market where the asset management business has been growing rapidly. Thailand's AUM stands at one fifth of India's AUM, and KFin Tech says this is 100% of the target addressable market for the company, given the absence of any competition yet.
The company is betting on a wave of financialisation to play out in other Asian economies as has been the case in India since the pandemic. "What we have seen in India over the last 2-1/2 years post-COVID is a very sharp mark-to-market gains as well as mutual fund financialization. Neither of these two trends have played out in any Asian country and we started to see green shoots of that happening in the last two quarters," MD and CEO Sreekanth Nadella had said during the September quarter earnings call.
Read More: MOSL sets target of Rs 1,400 for KFin Tech amid strong growth projections
KFin Tech September quarter revenue saw a growth of 25% on year, with 358 corporate clients added during the September quarter. KFin Tech has an AUM of Rs 1.3 lakh crore as of September quarter. Read more here. The company said it is the single-largest fund administrator in the GIFT City as of September quarter.
Shares of KFin Tech are higher by 161% so far this year, with a market capitalisation of close to Rs 22,000 crore.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
