Motilal Oswal sees KFin Tech as dominant, cash-generative; check outlook

KFintech is expected to deliver a compound annual growth rate of around 16 per cent in revenue, Ebitda, and profit after tax over FY25 to FY28, Motilal Oswal said

KFin Technologies Ltd. continues to dominate India's mutual fund investor solutions space, supported by its leadership across asset management companies, rising systematic investment plan market share, and a consistently high win rate in new mandates, according to Motilal Oswal Financial Services.

 

The company services 29 of the 54 mutual fund asset management companies in India and holds a 38 per cent market share in systematic investment plan flows. It has historically won mandates from 21 of 34 new asset management companies, including all four recent launches.

 

Mutual fund revenue rose 10 per cent year-on-year (Y-o-Y) to ₹220 crore, driven by strong net inflows and stable market share, contributing about 70 per cent of overall revenue. Management expects the share of mutual fund revenue to moderate over time as international operations, including the Ascent Fund Services business, scale faster, Motilal Oswal said.

 

 

The brokerage noted that the mutual fund business remains a high-quality annuity franchise, characterised by strong client retention, predictable assets under management, transaction-linked revenue, and technology-led scalability. The segment is expected to post a revenue compound annual growth rate of about 13 per cent over the financial year 2025 (FY25) to the FY28, while continuing to serve as a core cash-generative pillar.

 

Overall, KFintech is expected to deliver a compound annual growth rate of around 16 per cent in revenue, Ebitda, and profit after tax over FY25 to FY28. Motilal Oswal noted that the Kfin Tech stock trades at a premium to traditional capital market intermediaries, reflecting strong revenue visibility and high return on capital employed, and reiterated a 'Neutral' rating with a one-year target price of ₹1,200.

 

The brokerage also highlighted robust industry growth, noting that India’s mutual fund assets under management grew at a compound annual growth rate of about 20 per cent to ₹67.4 trillion between FY14 and FY25. Medium-term assets under management growth is expected at around 14-15 per cent, driven by rising incomes, improving investor awareness, and technology-enabled investing.

KFin Tech share price history

Shares of the company traded lower for the third straight session on Wednesday and have risen 1.5 per cent this month. The counter has fallen 30 per cent this year, compared to a 10 per cent advance in the benchmark Nifty 50. KFintech has a total market capitalisation of ₹18,642.59 crore. 

 

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