KFINTECHNSEJuly 29, 2025

Kfin Technologies Limited

11,059words
44turns
7analyst exchanges
4executives
Management on call
Sreekanth Nadella
MD AND CEO
Vivek Mathur
CFO
Amit Murarka
HEAD IR
Devesh Agarwal
IIFL CAPITAL SERVICES LIMITED
Key numbers — 40 extracted
75%
fund mandates out of 4 that have gone for a discussion and negotiation this quarter. So that's a 75% win rate, and it gives us a great deal of pride in terms of several marquee professionally run as
32.5%
the SIP, which is the surest indicator of the overall AUM. Given our overall AUM is roughly about 32.5% and SIP market share is about 39%, I do hope should this trend continue, we should continue to se
39%
or of the overall AUM. Given our overall AUM is roughly about 32.5% and SIP market share is about 39%, I do hope should this trend continue, we should continue to see upward trajectory in terms of th
48%
've been outperforming the industry by distance there. We've improved our market share from about 48% about 18 months back now to close to 51% in terms of the NIFTY listed companies by market cap. Th
51%
stance there. We've improved our market share from about 48% about 18 months back now to close to 51% in terms of the NIFTY listed companies by market cap. The total roster of the corporate clients h
10%
inform you that in a very, very short period of time, we crossed the double-digit market share of 10% in the overall trends in the country despite the fact that we do not operate in the government se
34%
AIF has been growing at a sharing pace. We continue to expand our market share from 34% to 37% at this point in time. We are now the most preferred alternatives player in the country,
37%
AIF has been growing at a sharing pace. We continue to expand our market share from 34% to 37% at this point in time. We are now the most preferred alternatives player in the country, given th
2.5 million
mes to come. The volume transactions has been certainly on the rise. Now we process a little over 2.5 million on an average. On peak days, it touches 10 million transactions, and we expect these numbers to
10 million
nly on the rise. Now we process a little over 2.5 million on an average. On peak days, it touches 10 million transactions, and we expect these numbers to compound at about 20% to 25% into the coming few yea
20%
n peak days, it touches 10 million transactions, and we expect these numbers to compound at about 20% to 25% into the coming few years. This quarter also saw an important milestone in terms of severa
25%
days, it touches 10 million transactions, and we expect these numbers to compound at about 20% to 25% into the coming few years. This quarter also saw an important milestone in terms of several new p
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Guidance — 20 items
Devesh Agarwal
opening
“I would now hand over the call to Sreekanth for his opening remarks, which will be followed up by a Q&A session.”
Sreekanth Nadella
opening
“On peak days, it touches 10 million transactions, and we expect these numbers to compound at about 20% to 25% into the coming few years.”
Sreekanth Nadella
opening
“I would like to also call out that our KRA solution is the only one, which is on to the tokenization world, which is probably the first to introduce and the very many applications that we expect to see in time to come with will be seen by the world and will definitely further the onboarding journey to be far more frictionless and far more cost effective, if I may.”
Sreekanth Nadella
opening
“We expect a far fungible and a path which we can easily traverse into many different countries in a rather quick time.”
Sreekanth Nadella
opening
“And we have another probably 1 or 2 quarters left in terms of the revenue that was clocked in the previous year, no longer will be available now, and by which time, we will have completely exited, keeping our focus entirely on the asset and the wealth management solutions, not to divest to other businesses.”
Sreekanth Nadella
opening
“I expect that to happen most likely in the next 12 to 14 months.”
Sreekanth Nadella
opening
“So products and platforms and innovation will be a large focus for KFin Tech.”
Sreekanth Nadella
opening
“And given their trajectory, we expect rapid growth of their AUM in times to come as well.”
Sreekanth Nadella
opening
“And as we scale it up and as we take it to global clients, we'd like to believe that this is a medium- to long- term play, but I'd like to believe that there will come a time when we will be reasonably well positioned to take several of the global large platforms head on even as we consolidate our position here in India.”
Vivek Mathur
opening
“So we have been giving a guidance that yield will come down year-on-year by 3.5% to 4% with a combination of telescopic pricing and some selective discounts that we will give, but there is no yield shocks that we expect from KFin Tech.”
Risks & concerns — 10 flagged
And as you know, in the Q1, the increment hits, while the impact of growth in business revenue will come in subsequent quarters.
— Vivek Mathur
So while on year-on-year, I think it looks fairly strong, but quarter-on-quarter, it is a bit weak.
— Swarnabha Mukherjee
If you saw the math, I guess it clearly points to the fact that our clients have chosen to be more cautious and stick to passives.
— Sreekanth Nadella
See, I think, yes, there is a sequential marginal decline.
— Sreekanth Nadella
And in fact, that is at least a highly recommended strategy, at least from my standpoint because it is always a business risk to have a single point failure, right?
— Sreekanth Nadella
And therefore, you won't see the immediate impact of increase in revenue and EBITDA margins.
— Vivek Mathur
Again, I will call out that Aladdin is a front office order management system and a risk management system at its heart.
— Sreekanth Nadella
I'll pick up the question on sequential decline of 11% quarter-on-quarter on the international.
— Vivek Mathur
On the 11% decline on international Issuer Solutions, the reduction is mainly because of GBS and some part of it is because of NPS.
— Vivek Mathur
So that's the reason that you see a decline.
— Vivek Mathur
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Q&A — 7 exchanges
Q
First question on the mutual fund business. So as you highlighted on the yields, just wanted to understand how much -- so broadly from the end of last quarter, the yields are down around 5- odd percent, which is more or less -- I mean, I think you normally guide around 3% to 4% for a year. And in a quarter, we are seeing that. So just wanted to understand that how much of this is because of telescopic pricing, how much is it because of the volume discounts that you gave to fast-growing clients and this volume discounts that you have given, say, assuming that the mutual fund industry continues
Sreekanth Nadella
Thanks for the questions. So on the first question, I'll take it in terms of the basis points and the yield compression. We were at about 3.6, now down to about 3.43. You're right. I think it marks about close to 5% as against a typical year of 3% to 4%. I just want to call out that number is more an average. The contract renewal is entirely and solely dependent on the time of the signing of the contract itself. It is a coincidence that this year, we've had more number of clients whose contracts came up for renewal. For example, if you look into the next year and the year after, we just have 1
Q
So my first question is, assuming the normal yield declines at about 3% to 4%, and we are assuming an overall AUM growth in the region of, let's say, 12% to 15%, would it be fair to assume that we should be able to hold our domestic mutual fund margins at these levels? Or what else do we need to happen for margins to kind of sustain in this current range?
Sreekanth Nadella
Thank you, Karthik. Great question. One that I can assure you is always on the top of our minds. I think the good and bad part of, I guess, the way the industry is structured is a basis point or a mark-to-market gains, it cuts both ways. You will have months, quarters, years when mark-to- market gains will add to both to your top line and to the bottom line, right? And likewise, it cuts both ways. When there is a mark-to-market dip and/or if there is a basis point reduction, it goes both from the top line and the bottom line. So that obviously is not the same if you were to extrapolate that in
Q
My first question is on the Issuer Solutions business. So if I look at the market share in MainBoard IPOs, that was around 18% versus it being around 50%, 70% in the previous years. So just wanted to understand, has the competitive dynamics in this segment changed? Or what are you seeing different, which has resulted in KFin not being able to win the larger bank deals? That was my first question. I have 2 more.
Sreekanth Nadella
Yes, please. Second question. Do you want me to go through all the 3 questions or... No, let me answer that. Let me answer that and we can go to the second question then, Supratim. So here's the deal. So I think by count of IPOs, we've done over 40% in the industry, yes. And by value, it was 18%. It is a simple math in terms of, I guess, HDB Financial having gone public, which was the largest IPO in the previous quarter, which was listed by our competitor. And that skewed the overall share by value. And this is not a reflection of the win, but this is a reflection of when the particular compan
Q
So I just wanted to know, on the international business side, so there is a Q-o-Q drop of 11%. So is there some like one-off or something? And like ex global business, what is the growth that looks like? Also on the asset side, have we added any new clients? And when are we expecting the consolidation to take place? And if there are any developments happening in the BlackRock Aladdin space?
Sreekanth Nadella
I'll take the last 2 questions, and I'll request Vivek to answer the first one. In terms of Ascent's new client acquisition, there have been plentiful of new client acquisitions. They have started Saudi Arabia with one of the largest clients, and they raised an expansion of nearly 60-plus funds in the previous quarter across multiple geographies. They have also signed a marquee contract with one of the largest banks in Singapore to be able to provide onboarding solutions, which is a large contract in the context of the overall revenue profile of the organization. The current run rate of revenu
Q
Just 2 questions from my side. First, from the previous participant's question, if I look at the international and domestic wealth or AIF businesses, excluding GBS and excluding pension, growth rates which was tracking -- so if I just take cues from the previous participant's question. In terms of the international and other investor solutions, excluding GBS and pension also, the growth rates which are tracking like say, 45%, 50% in the first, second, third quarter of last year on a Y-o-Y basis now has come down to like 25%, 30% in the last 2 quarters. So in terms of incremental client onboard
Vivek Mathur
Yes. So I'll pick up the question. On your question on -- other than GBS, the businesses are growing, used to grow at 40%, 50%. That was more in AIF. But if you look at core international business, that has grown year-on-year at 36%. AIF, PWM, PMS has grown at 31%. NPS has grown at almost 33% year-on-year. So it's mainly the GBS impact. So overall, we still believe 30%, 35% growth in international and other businesses, except GBS will continue to behave like that. And with Ascent coming in, you will see the growth rate going up because their win rate and the growth in the funds under administr
Q
Sir, just one question. So when we have highlighted that the yields in the domestic business is likely to remain stable for the remaining part of the year. So just wanted to understand the EBIT -- margins also in this business. So in this particular quarter, it has dropped to around 55% unlike the previous quarters of around 59% to 60%. So would we be back to that similar levels of around 59%, 60% in the coming quarters? Or is this the new normal of around 55%.
Sreekanth Nadella
I think it's a reasonably linear math, given that the pricing has been closed for the rest of the year. So the AUM expansion that will happen into the next 3 quarters, resulting in the revenue expansion month-on-month, quarter-over-quarter, obviously will expand the margin profile. So I do not anticipate that trajectory to differ. Again, I'll just call out, it is the exact same phenomenon we see every single year. Q1, we see 2 specific items, hit of inflation on April 1 because AUM remains largely similar. 31st March to 1st of April, there is a cost inflation that goes up. And the AUM, any dis
Q
I think Sreekanth, in the opening comments, you were mentioning about top 5 AMCs being onboarded on the fund administration platform. So I just want to get a sense of what could be the ticket sizes of these contracts?
Sreekanth Nadella
See, on the fund admin, basically, we have multiple clients getting onboarded. So given this is an international platform, it is -- we won contracts in Malaysia, in Thailand and Singapore and several, of course, in India. And within India, again, not just mutual funds, but also in insurance, right? For example, in insurance, we have been onboarded for Aviva Insurance. In the case of mutual funds, it is JM and Cosmia. Internationally, several large trustees, including Amanahraya trustee managers, so on and so forth have been onboarded on that. The revenue would be in 2 factors. I think some of
Speaking time
Sreekanth Nadella
14
Moderator
9
Vivek Mathur
5
Supratim
5
Swarnabha Mukherjee
2
Karthik Chellappa
2
Vaibhav Sharma
2
Devesh Agarwal
1
Dipanjan Ghosh
1
Amit Murarka
1
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Opening remarks
Devesh Agarwal
Thank you, Ryan. Good morning, everyone and welcome to the Q1 FY '26 Earnings Call of KFin Technologies Limited. Today from the company, we have with us Mr. Sreekanth Nadella, the MD and CEO; Mr. Vivek Mathur, CFO; and Mr. Amit Murarka, Head of Global Business Finance, M&A and Investor Relations. I would now hand over the call to Sreekanth for his opening remarks, which will be followed up by a Q&A session. Thank you, and over to you, Sreekanth.
Sreekanth Nadella
Thank you so very much, Devesh, very good morning and a warm welcome to one and all. It gives me great pleasure for me to come back to you again with yet another stellar quarter for us. I will start with the qualitative commentary and I will discuss the financials at the very end. We continue to be the country's largest registrar by a mile. We are the only qualified RTA who straddles across both sides of the registry business. One of it is the investor solutions and services, which is mutual funds, alternatives, pensions, private retirement schemes, what have you. And on the issuer side, where we are the share transfer agent for a vast majority of the corporates. It gives me great pleasure to call out some few important standout milestones we have accomplished this quarter. I'll start with mutual fund business. To start with, we continue to outgrow and outperform the industry in terms of AUM growth, albeit by a small margin this quarter. We grew marginally ahead of the overall industry
Vivek Mathur
Thanks, Sreekanth. On the financials, the revenue has gone up year-on-year by 15.4%. Within that, the domestic mutual fund grew by 17.2%. Within this 17.2%, the fee-based revenue has gone up by 15.7% and the VAS revenue has gone up by 51% year-on-year. The yield has come to 3.43 bps as compared to 3.6 bps last year same quarter. And that's a combination of the telescopic pricing impact and some volume-based discounts to some fast-growing AMCs that we have given. So we have been giving a guidance that yield will come down year-on-year by 3.5% to 4% with a combination of telescopic pricing and some selective discounts that we will give, but there is no yield shocks that we expect from KFin Tech. So we maintain that. In terms of Issuer Solutions, the growth has been 25.5% year-on-year. And as Sreekanth mentioned, we have been adding IPO mandates and unlisted clients. Almost 800 clients have been added in the last quarter itself. If you look at international and other investor solutions, t
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