KFINTECHNSENovember 04, 2025

Kfin Technologies Limited

11,190words

57turns

9analyst exchanges

4executives

Download PDF ↗KFINTECH stock page →

Management on call

Sreekanth Nadella

MD AND CEO

Vivek Mathur

CFO

Amit Murarka

CFO, INTERNATIONAL BUSINESS AND HEAD IR

Devesh Agarwal

IIFL CAPITAL SERVICES LIMITED

Key numbers — 40 extracted

rs,

ch -- a new mutual fund will only add revenue maybe 3 years from the day of signing up, 3 to 4 years, and all depending upon how they perform. So it is critically important that we stay focused in ter

40%

Our SIP book continues to hold well, closing -- closer to 40%, and I continue to believe any long-term projections should be tethered to where the SIP is today

as against a fixed fee per prime, which was the situation back in the day. We continue to grow at 3x the pace of the industry, and we have crossed a double-digit number. We are 10.3% in the overall

10.3%

ontinue to grow at 3x the pace of the industry, and we have crossed a double-digit number. We are 10.3% in the overall industry, participating nearly entirely only on private markets. So that clearly e

s. So that clearly explains to you in terms of our market share in the private sector is at least 4x that of the overall industry. And this is an area we will continue to invest our time, effort and

INR1.8

e to become a large functionable society. AIF, we crossed INR1.8 trillion. I think we will cross INR2 trillion by the next time I speak easily. Again, a fledgling

INR2

y. AIF, we crossed INR1.8 trillion. I think we will cross INR2 trillion by the next time I speak easily. Again, a fledgling asset class and something that we hav

50%

to manage close to 40% of the overall industry and one that we are confident we will get close to 50% into the next 12 to 18 months. And GIFT city, our numbers are much higher, of course, close to

60%

into the next 12 to 18 months. And GIFT city, our numbers are much higher, of course, close to 60% combined with Ascent, that gets to about nearly 3/4 of all funds are being managed by the combine

INR30

platform our 40-year-old tech platform on which nearly 50% of retail investors and about close to INR30-plus trillion of AUM is being managed. It's not an easy task. And we believe that from here on,

INR309 crore

. About the financial results for the half year ended September 2025. For the Q2, our revenue was INR309 crores, which was 10.3% higher year-on-year for the same quarter and sequentially 12.8% higher. For the

12.8%

enue was INR309 crores, which was 10.3% higher year-on-year for the same quarter and sequentially 12.8% higher. For the half year, it was 12.6% year higher as compared to last year half year. If you lo

Advertisement

Guidance — 20 items

Devesh Agarwal

opening

“I would now like to hand over the call to Sreekanth for his opening remarks, which will be followed by a Q&A session.”

Sreekanth Nadella

opening

“If we are 40%, there is no doubt in my mind there would come a time into the history of KFintech where we will reach the overall market share to closer to that number, as SIP will be the determining factor in terms of the overall AUM over a long period of time.”

Sreekanth Nadella

opening

“And given we have much of our alternate investment funds are also in Cat III model, our mark- to-market gains in AIF also will be advantageous to us.”

Sreekanth Nadella

opening

“Now again, with the markets turning the corner, I expect retail investors to come back.”

Sreekanth Nadella

opening

“And hence, we will be able to consolidate our books into the coming quarter.”

Sreekanth Nadella

opening

“We have a few more that we will be starting into the coming year, if not into the coming quarters.”

Sreekanth Nadella

opening

“So hopefully, in time, there will be some good news that we will be able to announce it as well.”

Vivek Mathur

opening

“So there were some one-off expenses, as Sreekanth mentioned, but I think we are range bound in terms of our guidance on EBITDA and PAT, and we are confident that we'll be able to maintain that guidance once even asset integration takes place in the next quarter.”

Karthik Chellappa

“And what is a sustainable level of margins going forward for the Issuer Solutions segment?”

Karthik Chellappa

“So can we take it that going forward, at least for the rest of the year, the yields should settle down at current levels, which means on a sequential basis, the AUM growth and the revenue growth in the segment should more or less start to mimic each other.”

Risks & concerns — 7 flagged

We have seen amidst fairly volatile markets, we have delivered results, which we believe we are reasonably satisfied with.

— Sreekanth Nadella

If we were to look at this quarter's performance, we have seen a decent amount of margin compression in the Issuer Solutions segment.

— Karthik Chellappa

So could you just give us some color on what led to those margin compression?

— Karthik Chellappa

And conscious of the risk that is associated with this in terms of frauds and what have you, we have incurred certain professional charges, which is probably a onetime activity and may continue for another quarter or so in terms of vetting the transactions that we're clearing.

— Sreekanth Nadella

Obviously, we are looking at Q2 numbers when the markets were definitely volatile.

— Sreekanth Nadella

So this is not -- so just taking the queue out of your question and the previous participant's questions and also, there is no -- so we are not talking about any sequential pressure on the yields in the Q3 and the Q4 and all.

— Amit Murarka

If you look at KFin also and start the continuum from 5 years back and see where Ascent, rather than KFin looking from last 40 years, both of us have done similar -- have a similar trajectory, which is very strong vision, strategic intent, conviction and support from the Board and the promoters to invest in younger, faster-growing businesses to add more, to diversify risk, so on and so forth.

— Sreekanth Nadella

Advertisement

Q&A — 9 exchanges

I have two questions. The first one is on Issuer Solutions. If we were to look at this quarter's performance, we have seen a decent amount of margin compression in the Issuer Solutions segment. While I note that the base quarter margins were probably elevated and so not the right base, but nevertheless, we have seen some compression. So could you just give us some color on what led to those margin compression? And what is a sustainable level of margins going forward for the Issuer Solutions segment? That's my first question.

Sreekanth Nadella

Thank you, Karthik. So there are two distinct reasons for that, and which is transitory and something that is not going to be repeated for a sustainable period of time. One is, since there have been so many new IPOs that we have handled in the recent past. Our labor costs are basically semi-linear, which means that up to a particular new client acquisition and addition, our current manpower is adequate to take on, right? And hence, there is no additional cost associated with that. But once the number crosses a particular threshold, there is as much that can be leveraged out of existing staff,

My first question was on the KRA business. Sometime back, you mentioned about getting into this line of business as well. So I was just trying to understand what would be the broad strategy? How would you want to scale this up? How would you differentiate yourself? Any broad thoughts and some specific pointers in terms of strategy would be helpful.

Sreekanth Nadella

Thank you, Abhijeet. So we have -- whilst we have launched our product into the previous quarter, the go-live actually happened this quarter. I did not anticipate, but there were delays in terms of integration that is required with all other KRAs, which basically pushed the live operations into this quarter -- into this month, in fact. And so basically, it's an interoperable solution, as we all know in the KRA. We -- our strategy -- one of the reasons why we've gotten into KRA business is that we anticipate at some point in time, a unified KYC for all financial services, right, that cutting ac

My question is about the international operations. So with the now Ascent coming into the picture, how do you see this business over the next few years? Do you see really that international business could overtake the domestic operations in the next few years?

Sreekanth Nadella

So let's do the math. I mean, international business today, I mean, should be equated, I guess, with mutual fund business plus AIF, right? And that is what my international business is also going to be. If you add up India mutual funds and AIF business and equate that with KFin's own organic international business with that of Ascent's numbers, right? I mean I don't see a scenario where the international business will overtake domestic in the next 2 to 3 years. I think that gap is too large and too wide. India's mutual fund business itself is growing at a very fast rate. We continue to expand

Congrats on a good set of numbers. Three questions from my side. First, on the mutual fund segment. So I just wanted to understand that of the revenues you have reported in this segment, what is the proportion of value-added services in that? Because you have given a number of 9.3% of total revenue, which is around INR28 crores, INR30 crores. So out of that, how much pertains to mutual fund, if you can give so that we have like a better clarity in terms of how the AUM-based yields developed over the quarter? Because last quarter, there was a squeeze. So some color on that would be helpful, whe

Sreekanth Nadella

I will request Vivek or Amit to answer first and the third. I will just quickly answer the folio bit, which I have briefly done. Obviously, we are looking at Q2 numbers when the markets were definitely volatile. There has been a reasonable amount of exodus of the retail investors away from the industry. And there is precious little as an organization or a management we can do in terms of portfolio expansion. What we can do, however, is keep winning a lot of new clients, right, keep transitioning clients. That's the only thing that is in our hands. How the retail investors would invest in the m

Hope I'm audible. So just a few questions from my side. First, going back to the previous participant's question on Ascent. If I were to look at the gross realizations, which is a basis points of average AUM, that seems to have been on a downward trajectory for some quarters. I understand that there was a large deal that happened last year. So I just wanted to get some color on what is really driving this realization downward trajectory and how to really think of it going ahead. Second, I see there has been some restatement of Ascent's 2024 EBITDA numbers. So if you can give some color on the

Vivek Mathur

Sreekanth, I'm requesting Amit to talk about Ascent and then maybe you can pick up about domestic mutual fund, and then I'll pick up the cost. Amit? Thanks, Vivek. So, Dipanjan, as far as the realizations are concerned, they are in the range of around 6 to 8 basis points on average. And we expect that kind of range will continue. So even on the base of the July '25 numbers also, if you see, I think that translates close to around 6.5 kind of basis points and all. And this is considerably higher than what we have around 5, 5.2 basis points in our -- the GFS business and all. Secondly, with resp

I've got two questions. So actually, I was looking at your international operations where a meaningful portion now comes from the GIFT City. So I wanted to understand how the underlying economics compare, say, a fund administration pricing for a Malaysian client versus a similar work done for a client in GIFT City. So how does the pricing and margin profile differ? That's question number one. Question number two, continuing the question on Ascent. Basically, the top line numbers look very impressive. And I think you told that there have been one-off this quarter as well. My question is that ho

Sreekanth Nadella

Yes. So GIFT City funds -- so first of all, KFin does not do private mandate administration, accepting a few in Canada or so. Our international business is mostly around mutual funds, pensions, private retirement schemes, as you're aware. So we then have to compare, I suppose, our GIFT City yield versus what Ascent generates in Singapore, et cetera. As Amit has already clarified, our yield is roughly about 6- to 7-odd basis points in international. That is what Ascent is driving. GIFT City would be no more than 2 to 2.5. So clearly, you're seeing a huge gap in terms of, I guess, how Indian cli

I have a couple of questions. Firstly, on Ascent again. So your 9 months number of EBITDA was INR0.3 million. And now full year adjusted for that M&A also, we are down roughly INR0.1 million. So we have actually declined in the last 3 months. So can you give any color on that? That's the first question. And the second question is on the NPA side. I think so Sreekanth in his opening commentary mentioned that it would be moving to an AUM-based fee rather than a fixed fee structure. So can you give some more color on that as well? So those are the two questions.

Amit Murarka

So yes, so I mean, that's INR0.3 million to INR0.1 million, those are largely with respect to, again, we will subsume -- we'll assign more to the transaction-related costs itself. So there are - - I mean, with respect to the councils and the other -- the diligence that they have taken on part of their side in terms of the vendor DDs and all. So on account of that, I mean, the number of another INR20,00,000 or rather INR3,00,000 that has kind of been added to that cost and all. But we expect that going forward, these numbers will only improve, and more -- it will more be a play on the operating

First of all, congratulations for the good set of numbers. I would have two questions. Firstly, on the part of that in the new SIF segment, I can see that you have won 3 new mandates. So could you share the potential as well as what could be the RTI economics over the same?

Sreekanth Nadella

No, not 3. We have won several mandates. We have won 50 plus in total. So taking our count to close to 650-odd mandates. The economics are same depending upon which mandate it is. We have moved away from fixed fee per scheme, so on and so forth. Everything is on basis points, much like mutual funds and now pensions as well. Depending upon the scope, if it is only transfer agency work, it will be about 1.5 basis points thereabouts. If it is transfer agency plus fund accounting, it will be around 2.5 to 3 basis points. And of course, market dynamics exist for each of the funds, so there can be p

Thank you very much to all the attendees for attending the earnings call today. We continue to put in our best efforts to grow the company both from the top line and bottom line perspective, and our guidance holds good in terms of EBITDA margin of 40% to 45%. In the next quarter, you will see the integration of Ascent and its impact on the top line and bottom line. Thank you so much for joining today.

Management

Speaking time

Sreekanth Nadella

Moderator

Vivek Mathur

Amit Murarka

Mohit Mangal

Sayyam Ranka

Karthik Chellappa

Abhijeet

Swarnabh Mukherjee

Uday Pai

Advertisement

Opening remarks

Devesh Agarwal

Thank you, Iqra. Good morning, everyone, and welcome to the Q2 FY '26 Earnings Call of KFin Technologies Limited. Today from the company, we have with us Sreekanth Nadella, MD and CEO; Vivek Mathur, CFO; and Amit Murarka, the CFO of International Business and Head of Investor Relations. I would now like to hand over the call to Sreekanth for his opening remarks, which will be followed by a Q&A session. Thank you, and over to you, Sreekanth.

Sreekanth Nadella

Thank you so very much, Devesh. A very good morning, and a very warm welcome to one and all. Happy Diwali and a wonderful festive season that has just gone by and then ahead of ourselves. As the festival season typically augurs good news for most Indians, it has been no different for KFintech. We have completed Q2 yet another successful quarter, marked by a fairly well- rounded performance across various aspects of our business, client acquisition, revenue generation, cost optimization through margin expansion, new client logos, expansion into newer businesses, launch of new products and acquisitions, so to speak. So it's been a fairly busy quarter for us. We have seen amidst fairly volatile markets, we have delivered results, which we believe we are reasonably satisfied with. As always, there is always room for improvement, and that's what we continue to learn. We continue to be the country's largest registrar and transfer agent by a mile in terms of number of clients in mutual funds,

Vivek Mathur

Thank you, Sreekanth. Good morning, everyone. About the financial results for the half year ended September 2025. For the Q2, our revenue was INR309 crores, which was 10.3% higher year-on-year for the same quarter and sequentially 12.8% higher. For the half year, it was 12.6% year higher as compared to last year half year. If you look at the breakup of the revenue growth on a year-on-year for the same quarter, the domestic mutual fund business grew by 10.2%, International and Other Investor Solutions grew by 7.1%. But if we look at the core business, excluding the GBS business, the growth was 26.1%. Within that, the Global Fund Solutions growth was 14%. The pension business grew by 21%. The AIF, PMS, PWM business grew by 28%. Hexagram grew by almost 54%. Webile grew by 18%. GBS degrew by 70%. And if you look at half year, the growth in domestic mutual fund business revenue was 13.5%. And if you look at International and Other Investor Solutions, it was about 3.8%. But if you exclude GB

Advertisement

← All transcripts KFINTECH stock page →

Kfin Technologies Limited

Market Movers