Company Update : KFin Technologies by Motilal Oswal Financial Services Ltd
In-line performance
* KFin Technologies (KFin) reported a 10% YoY growth in operating revenue to INR3.1b in 2QFY26 (in-line), driven by 10%/16%/33% YoY growth in domestic MF solutions/issuer solutions/international solutions segments.
* Total MF AAUM serviced during the quarter grew 17% YoY to INR25t. Equity AAUM at 58% of total MF AAUM, grew 14% YoY to INR14.6t reflecting a market share of 33% (33.4% in 2QFY25).
* In the issuer services business, the main board IPO market share (concerning issue size) rose YoY to 43.8% in 2QFY26 (34.4% in 2QFY25). In the international investor solutions business, the number of clients reached 93, taking the total AUM serviced to INR934b. In the alternates and wealth business, the market share stood at 39% with an AUM of INR1.8t. NPS market share continues to rise and was at 10.3% in 2QFY26 (8.9% in 2QFY25), with an AUM of INR602b.
* Total operating expenses grew 13% YoY to INR1.7b (in-line) with employee expenses growing 12% YoY to INR1.1b (in-line) and other expenses growing 14% YoY to INR595m (in-line). Cost-to-income ratio was at 56.1% (54.9% in 2QFY25).
* EBITDA grew 7% YoY to INR1.4b with EBITDA margins at 43.9% (45.1% in 2QFY25).
* KFin reported a net profit of INR933m, up 4% YoY (in-line) in 2QFY26 with PAT margins at 30.2% vs 31.8% in 2QFY25. For 1HFY26, it reported PAT of INR1.7b, +8% YoY.
Valuation and view
* Structural tailwinds in the MF industry will drive absolute growth in MF revenue. With its unique ‘platform-as-a-service’ business model that provides comprehensive end-to-end solutions enabled by proprietary technology solutions, KFIN is well-positioned to benefit from strong growth across large markets in India and across the world.
* We have a Neutral rating on the stock with a TP of INR1,130 (based on 45x Mar’27E EPS). We will update our estimates after the conference call scheduled for 28th Oct’25.
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