Kolkata: In the midst of the public issue frenzy which has taken Dalal Street in its grip, US-based brokerage Jefferies has predicted a bright future for the KFin Technologies stock. The company is one of the biggest beneficiaries of the IPO whirlwind by becoming the registrar for most IPOs. Significantly, public issues are not the only area of business of KFin Technologies, which is a tech-driven financial services platform which acts also acts as a central record keeping agency for the National Pension Scheme in India apart from offering a wide range of services including SaaS-based transaction management, compliance solutions, data analytics, and channel management and its clients are also based beyond India, especially in Southeast Asia. In its report, Jefferies has mentioned that KFin Technologies is “ramping up the franchise” across domestic and overseas markets.

Target price for KFin Technologies

Around 11 am on Dec 4, the Kfin Technologies stock was trading at Rs 1,074.40, up Rs 3.00 (or 0.28%). Jefferies has set a target price of Rs 1,440 with the Buy rating. The target price places the maximum upside at Rs 1,600, which implies an almost 49% upside from the current market levels. The bear-case valuation has been assigned a target of Rs 950.

Market share of KFin Technologies in mutual fund

Jefferies mentioned that mutual fund business provides the main source of revenue for KFin Technologies. Its market is rising in this domain with sound technology infrastructure and increased operational efficiency across fund houses. The US-based brokerage thinks MF business will remain an anchor for Kfin, even as the company diversifies aggressively. The brokerage also thinks that more customers have not only onboarded but also stuck to the platform, raising the retention factor.

In a recent roadshow, investors repeatedly asked about pricing pressure in the MF business and Jefferies has said KFin expects pricing to remain mostly stable.

Global expansion of KFin Technologies

Investors seemed to be enthusiastic about the expanding footprint of KFin Technologies in the global markets. Some of the countries where the company recently won contracts include the Philippines, Malaysia, Canada and West Asia. The focus on these markets are justified by the management since these markets offer large, long-term opportunities. Over the next decade this pie can grow large. The global operations usually indicate higher revenue per client compared to the Indian business. Jefferies also flagged the strength that KFin’s platform is modular and can be adapted across different markets without making heavy investments for international expansion.

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