Buy KFin Technologies; target of Rs 860: Nuvama Institutional Equities

BUY

Nuvama Institutional Equities' report on KFin Technologies

MF RTA/international and alternatives segment grew 27.3%/47.0% YoY in Q4FY24 driving KFINTECH’s revenue growth to 24.7% YoY. MF RTA equity/international business AUMs under service grew 43.2%/11.6% YoY. Issuer solutions posted tepid growth of 14.2% YoY/(16)% QoQ. EBIT grew 24% YoY as margins declined 23bp YoY to 39.4% as costs increased sharply by 24.6% YoY. Lower tax rate (20.8%) aided APAT growth of 30.6% YoY/11.4% QoQ.

Outlook

We mildly raise our FY25E/26E NOPLAT by 4.6%/7.7%. Maintain ‘BUY’ with increased TP of INR860 (earlier INR780), valuing the stock at FY25/26 P/E of 49.7x/41.8x.

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KFINTECH