Neutral KFin Technologies; target of Rs 1300: Motilal Oswal

Motilal Oswal's research report on KFin Technologies

KFin Technologies (KFINTECH) reported 33% YoY growth in operating revenue to INR2.9b in 3QFY25 (in-line), driven by 37%/17%/52% YoY growth in domestic MF solutions/issuer solutions/international solutions. For 9MFY25, revenue grew 33% YoY to ~INR8.1b. Total operating expenses grew 32% YoY to INR1.6b (in-line), resulting in 33% YoY growth in EBITDA to INR1.3b (in-line). While employee costs were in-line, elevated tech costs resulted in a 4% miss on other expenses. EBITDA margin expanded to 45% in 3QFY25 vs. 44.8% in 3QFY24 (our est. of 45.9%).

Outlook

We expect revenue/PAT to post a CAGR of 22%/31% over FY24-27 and maintain a Neutral rating on the stock with a one-year TP of INR1,300, premised at a P/E multiple of 45x on Sept’26E earnings.