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In-line performance across parameters

* KFin Technologies (KFIN) reported 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 MF AAUM serviced during the quarter grew 26% YoY to INR21.9t. Equity AAUM grew 26% YoY to INR12.7t, accounting for 58% of total MF AAUM and reflecting a market share of 33.1% (33.4% in 4QFY24).

* In the issuer services business, KFIN’s main board IPO market share (in terms of issue size) surged 1.7x YoY to 72.9% in 4QFY25. In the international investor solutions business, the number of clients reached 76, taking the total AUM serviced to INR813b. In the alternates and wealth business, its market share stood at 36.8% with AUM of INR1.5t. NPS market share continued to rise to 9.8% in 4QFY25 (8.3% in 4QFY24), with AUM of INR542b.

* Total operating expenses grew 30% YoY to INR1.6b (in line), with employee expenses growing 20% YoY to INR1b (in line) and other expenses increasing by 52% YoY to INR588m (in line). The cost-to-income ratio stood at 57% (54.2% in 4QFY24).

* EBITDA grew 17% YoY to INR1.2b (in line) with EBITDA margin of 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).

* KFIN reported a net profit of INR851m, up 14% YoY (in line), in 4QFY25. For FY25, PAT rose 35% YoY to INR3.3b.

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 in the world.

* With the recent acquisition investment in Ascent Fund Services, KFIN will be recognized as the first global fund administrator in India with exposure to diversified geographies, leading to AUM expansions. We have a Neutral rating with a TP of INR1,200 (based on 40x Mar’27E EPS).

* We will update our estimates after the conference call scheduled for 29th Apr’25.

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