Buy KFin Technologies; target of Rs 1100: Emkay Global Financial

Moneycontrol • 4 days ago

Original source

Key Investment Pillars

  • Strong growth in Issuer Solutions business, with 58% qoq growth, driven by large IPOs and folio growth from net new IPO clients.
  • International business pipeline remains healthy at $47mn, with 18 new client additions expected to go live in the next 1-2 quarters.
  • Margin expansion due to cost optimization and operating leverage, with EBITDA margin improving to 40.1% in 2QFY27.
  • Diversification of revenue streams, with MF AUM-based revenue expected to contribute around 50% in the next few quarters, down from 52% currently.

Thesis Validation Checklist

  • Growth in Issuer Solutions and international business revenue.
  • Improvement in EBITDA margin due to cost optimization and operating leverage.
  • Increase in client additions and pipeline growth for the international business.
  • Diversification of revenue streams and reduction in dependence on MF AUM-based revenue.
  • Management's ability to maintain guidance despite challenging macroeconomic environment.