Centrum Broking initiates with 'Buy' on KFin Tech; Check outlook, target

Centrum Broking initiated coverage on KFin Tech with a 'Buy' rating and a target price of ₹1,330, an upside potential of 28.5 per cent from Tuesday's closing price.

Centrum Broking initiated coverage on KFin Technologies Ltd., citing broad-based momentum and multiple growth engines supporting the company's medium-term outlook.

 

The domestic brokerage gave a 'Buy' rating and a target price of ₹1,330, an upside potential of 28.5 per cent from Tuesday's closing price. 

 

The brokerage said KFin continues to maintain a stable around 33 per cent market share in the duopoly registrar and transfer agent business, which remains its largest and most sticky revenue contributor and offers scope for cross-selling value-added services. 

 

The issuer solutions business has scaled up rapidly, with the company now holding about 50 per cent market share in the NSE 500 by market capitalisation and serving around 8,000 clients as of March 2025, increasing to about 9,500 clients by September 2025. Centrum expects the issuer solutions segment, supported by a strong presence in the initial public offering ecosystem, to deliver a 13 per cent revenue compound annual growth rate (CAGR) between the financial year 2025 (FY25) and FY28.

 

According to Centrum, the international and other investor solutions business has been a key growth driver, recording a 33 per cent compound annual growth rate over FY20 to FY25. The National Pension System segment remains small but stable. The acquisition of Ascent is seen as a key pillar of the international business, strengthening KFin's global fund administration capabilities and offering higher yield opportunities and long-term margin expansion, despite near-term dilution.

 

Centrum noted that KFin delivered a 19 per cent CAGR in revenue between FY20 and FY25, including a strong growth of 30 per cent in FY25. It projects a 21 per cent compound annual growth rate over FY25 to FY28. Ebitda margins are expected to remain robust above 40 per cent, at around 41.7 per cent in FY26 and rising to about 43 per cent by FY28. 

 

Profit after tax is expected to grow at a 20 per cent compound annual growth rate over the same period to ₹570 crore, while return on average equity is projected to stay healthy at 25-28 per cent, supported by a dividend payout of around 40 per cent.

 

One of the key drivers for KFin is its focus on leveraging its platform to offer value-added services such as analytics, customer relationship management and technology support, Centrum said. The company earned ₹77.5 crore from these services in FY25, accounting for 7 per cent of revenue from operations, up from about 4 per cent in FY20. 

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Disclaimer: The view/outlook has been suggested by Centrum Broking. Views expressed are their own.