KFintech zooms 20% on heavy volumes; soars 56% in 13 days post Q1 results

A combined 13.22 million equity shares, representing over 7 per cent of total equity of KFintech, changed hands on the NSE and BSE during the day

Shares of KFin Technologies (KFintech) hit a new high of Rs 1,092, soaring 20 per cent on the BSE in Friday's intraday trade, The shares extended their rally on strong business outlook, and settled 19.26 per cent higher at Rs 1,084. 

KFin Tech stock traded higher for the fourth straight day, surging 32 per cent during the period. The BSE Sensex, meanwhile, ended 820 points, or 1 per cent, higher at 79,706 level.

The counter saw huge trading volumes, with a combined 13.22 million equity shares, representing over 7 per cent of total equity of KFintech, changing hands on the NSE and BSE during the day. There were pending buy orders for around 150,000 shares till about 3:00 PM on both the exchanges.

Since July 24, that is, in the past 13 trading days, share price of KFin Tech has rallied 56 per cent after the company reported a strong performance across segments in the June quarter, led by new wins, revenue and profitability growth, and expansion in margins. In the past seven months, it has more-than-doubled, zooming 114 per cent from a level of Rs 508.

KFintech made its stock market debut on December 29, 2022. Currently, it is trading 198 per cent higher than its issue price of Rs 366 per share. 

KFintech is a leading technology driven financial services platform, providing comprehensive services and solutions to the capital markets ecosystem including asset managers and corporate issuers across asset classes in India. KFin Tech 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. 

As of June 30, 2024, KFintech stood as the largest investor solutions provider to Indian mutual funds in India, based on the number of Asset Management Companies (AMCs) serviced, and was the largest issuer solutions provider based on number of clients serviced as on June 30, 2024.

KFintech, with its multi-asset servicing platform, is well positioned to benefit from strong growth across large markets in India.

In the June quarter (Q1FY25), KFintech's profit after tax jumped 56.9 per cent year-on-year (Y-o-Y) to Rs 68.07 crore, aided by 30.9 per cent broad-based revenue growth at Rs 237.56 crore. The company said international and other investor solutions revenue was up by 56.6 per cent Y-o-Y, and VAS revenue up by 49.6 per cent YoY.

Earnings before interest, taxes, depreciation, and amortisation (Ebitda) grew 41.5 per cent at Rs 99.66 crore, and margin improved 315 bps to 42.0 per cent from 38.8 per cent in Q1FY24.

KFintech is among leaders in registrar and transfer agent (RTA) services for AMCs and corporate issuers. It is gradually evolving into a data processing and analytics solution provider with a higher share of value added services to clients to increase dependency, according to analysts at Jefferies.

Foray into the global AMCs & account aggregator segment can expand horizons and lift growth. Strong product proposition and vast experience in offering investor solutions can enable faster ramp up.

"Compression in domestic mutual fund (MF) yields will be slight drag, but traction in the international/alternative investment fund (AIF) segment is encouraging where mgt is also seeking merger & acquisition (M&A) prospects in the west. With good cash levels & strong platform, KFintech can capitalise on M&A opportunities," said analysts at Jefferies. The stock however, is above the brokerage firm's upside scenario target price of Rs 1,080 per share.