Neutral KFin Technologies; target of Rs 1150: Motilal Oswal

Motilal Oswal's research report on KFin Technologies

KFin Technologies (KFINTECH) reported a 24% YoY growth in operating revenue to INR2.8b in 4QFY25 (in line), driven by 23%/35%/16% YoY growth in domestic MF solutions/issuer solutions/international solutions. For FY25, revenue grew 30% YoY to ~INR10.9b. Total operating expenses grew 30% YoY to INR1.6b (in line), resulting in 17% YoY growth in EBITDA to INR1.2b (in line), with EBITDA margin at 43.2% (45.8% in 4QFY24). For FY25, EBITDA grew 31% YoY to INR4.8b, reflecting EBITDA margin of 43.9% (43.8% in FY24). KFINTECH reported a net profit of INR851m, up 14% YoY (in line) in 4QFY25. For FY25, PAT rose 35% YoY to INR3.3b. PAT margins for 4QFY25 stood at 30.1% in 4QFY25 vs 32.6% in 4QFY24.

Outlook

We have cut our earnings estimates for FY26/FY27 by 3%/5% due to lower AUM growth expected this year. We expect revenue/PAT to post a CAGR of 18%/21% over FY25-27. We maintain a Neutral rating on the stock with a one-year TP of INR 1,150, premised at a P/E multiple of 40x on FY27E earnings.

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