KFintech gains 8%, hits new high in subdued market; zooms over 200% in CY24

In the past six trading days, the stock price of KFintech has soared 29% after the company joined BlackRock's Aladdin Provider network to enhance its operating model with asset managers

Shares of KFin Technologies, a leader in technology and fund administration solutions for asset management companies, hit a new high of Rs 1,597.10, surging 8 per cent on the BSE in Thursday’s intra-day trade in an otherwise subdued market. In comparison, the BSE Sensex was down 0.01 per cent at 78,403 at 10:45 AM.

 

In the past two trading days, the stock has rallied 13 per cent on the BSE, while in the past six weeks, it has zoomed 66 per cent from the level of Rs 963.55 that it hit on November 14.

 

Since December 18, in six trading days, the market price of KFintech has soared 29 per cent after the company announced that it has joined BlackRock’s Aladdin Provider network to enhance its operating model with asset managers, making it more standardised and efficient. The collaboration will see KFintech join a growing community of the world’s largest asset servicers – enabling it to offer differentiated fund administration and accounting services to clients.

 

By leveraging the Aladdin platform’s proprietary data interfaces and workflows, KFintech will be able to better integrate the flow of data between KFintech and asset managers on the platform. This, in turn, will enable KFintech to digitise manual processes, align reference data and research fund activity in real-time, and conduct middle office operations on behalf of clients, the company said.

 

Meanwhile, on November 11, Computer Age Management Services Limited (CAMS), India’s largest registrar and transfer agent of mutual funds, had announced the formation of a joint venture company with KFintech, for MF Central. The company will jointly focus on all the development aspects of MF Central for technology, sales and marketing, and will further augment the mutual fund investment process for investors and expand the intermediary service suite.

 

KFintech is a leading technology-driven financial services company that provides comprehensive services and solutions to the capital market ecosystem. However, all segments of the markets are experiencing tailwinds, such as systematic investments in Indian mutual funds (MF), market share gain in issuer solutions and client wins in the international segment, among others. 

 

The company provides comprehensive investor solutions including transfer agency, fund administration, fund accounting, data analytics, digital onboarding, transaction origination and processing for alternate investments, mutual funds, unit trusts, insurance investments, and private retirement schemes to global asset managers in Malaysia, Philippines, Singapore, Hong Kong, Thailand, and Canada. 

 

Thus far in the calendar year 2024, the share price of KFintech has jumped over three times or 231 per cent, on healthy earnings, driven by growth in new client wins, revenue and profitability. In comparison, the BSE Sensex has gained 8.4 per cent during the same period.

 

In the first half (April to September) of the financial year 2024-25 (H1FY25), KFintech had reported a 50 per cent year-on-year (YoY) growth in profit after tax at Rs 157.39 crore. Revenue from operations grew 32.7 per cent YoY to Rs 518.04 crore. Earnings before interest, tax, depreciation and amortisation (Ebitda) margin improved 164 bps to 43.7 per cent. International and other investor solutions revenue grew by 44 per cent YoY, while value added services (VAS) revenue grew by 46 per cent YoY.

 

KFintech continues to witness strong business momentum in terms of new client wins, growth in revenue and profitability, expansion in margins, and accumulation of free cash flows. The Reserve Bank of India’s (RBI’s) in principle approval to set up a subsidiary in Thailand will add more strength to the company’s international business expansion plans, the management said.

 

The company is gradually evolving into a data processing and analytics solution provider, with a higher share of value added services to clients to increase dependency. Its foray into global AMCs and account aggregator segments can expand horizons and lift growth. Moreover, its strong product proposition and vast experience in offering investor solutions can enable faster ramp up, according to analysts.