KFin Tech Gains 2%, Approaching Record High as Jefferies Predicts 16% Upside

KFin Technologies’ shares surged by 2 percent, reaching Rs 480 per share on the BSE on October 12, following a positive update from global brokerage firm Jefferies. Jefferies has raised its target price for KFin Tech to Rs 560 per share, up from the previous target of Rs 500. At 9:55 am, the S&P BSE Sensex was down by approximately 80 points, a 0.1 percent decrease, with the index standing at 66,393 levels.

Throughout this year, KFin Tech’s stock, categorized as a midcap company, has witnessed remarkable growth, with a 35 percent increase, as compared to an 8 percent rise in the Sensex benchmark. Notably, on October 3, the stock had reached its all-time high of Rs 493 per share.

KFin Tech specializes in providing Software as a Service (SaaS) solutions for end-to-end transaction management, channel management, compliance solutions, data analytics, and a range of digital services to asset managers across various segments. Additionally, the company offers outsourcing services to global players, servicing 27 out of 46 Indian asset management companies (AMCs).

Jefferies’ analysts noted that KFin Tech is rapidly establishing itself as a leader in registrar and transfer agent (RTA) services for AMCs and corporate issuers. They highlighted that the company is transitioning into a provider of data processing and analytics solutions, with an increased emphasis on offering value-added services to clients to enhance their dependence on KFin Tech.

The brokerage firm also expressed optimism about KFin Tech’s expansion into the global AMC and account aggregator segments, which they believe will broaden its horizons and drive growth. They also raised their earnings estimates for the company by 1-2 percent, projecting a 17 percent compound annual growth rate (CAGR) in profits over the next three years.

KFin Tech’s international revenue accounted for 9 percent of its total revenue in fiscal year 2022-23 (FY23). Analysts anticipate a 30 percent CAGR in international revenue growth from FY23 to FY26, reaching 14 percent of the total by FY26.

Jefferies’ analysts also lauded KFin Tech for its ability to generate a substantial surplus and its prudent approach to acquisitions. They suggested that KFin Tech might be a high-growth emerging market peer for Indian and global platforms such as CAMS, SS&C, JTC Group, Vistra, CITCO, CSC, and Apex Group.

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