Buy KFin Technologies; target of Rs 525: IIFL Securities

IIFL Securities report on KFin Technologies

We initiate coverage on KFin Technologies Ltd. (Kfintech) with a BUY; and value the company at 30x FY26ii EPS with target price of Rs525. We like company’s diversified revenue model which lowers earnings concentration risk and offers higher growth optionality. It would benefit from the financialisation of savings trend in India given its leading position in multiple financial asset servicing; as well as is likely to deliver a stronger growth in the international business given potential for market share gains. Market infrastructure play with diversified revenue model: Kfintech provides comprehensive solutions to capital markets ecosystem including asset managers and corporate issuers across asset classes in India and abroad. It has created a well-diversified business model with market leading position in MF RTA (30% market-share on AUM serviced and 60% market share on AMCs serviced) & Corporate RTA (47% market-share) segments. Leveraging on its domain expertise and cost effective technology led solutions, Kfintech is now targeting the alternatives space, pensions, fund administration and is also rapidly expanding its RTA operations in South East Asia (SEA). Given Kfintech presence across financial assets i.e. MF, direct equity, alternatives, pensions, etc. – we see it as a key beneficiary of the financialisation of household (HH) savings trend in India.

Outlook

We value Kfintech at 30x FY26ii EPS with target price of Rs525.