Kfin Technologies Q3FY24 Concall

Financial Aspect

• Revenue growth of 16% year on year and net income growth at 21% for Q3 ending December 2023.
• Profit margin nearing 45% and PAT growth of 25%.
• The company attributes this growth to its focus on value-added solutions, which has grown nearly 60% year on year and now occupies about 6% of the total revenue profile.
• Non-domestic mutual fund business stands at 31% for the period ending 31st December 2023 and is growing faster than the more mature businesses of mutual funds and issue solutions.
• Mutual fund business itself has grown on the back of significant net flows into the industry and a massive spike in SIP.
• Kintech's AUM grew at 22.2% for the overall industry. They have gained about 30 basis points of market share in the preceding quarter on the overall AUM standpoint.
• The issue or solution standpoint, which is the other larger and traditional business of Kintech, has grown its profile. The company added 170 new clients in the preceding quarter, taking the number closer to 6,000.
• Their market share of the NC funded companies by market cap stands about 46.5%.
• Kintech's international expansion is a key differentiator. The total number of clients increased from 50 to 54 in the last quarter. Four of the transactions which started in Q1 and Q2 are due to go live in February and March, which means the revenue per four additional contracts will start kicking into Q1 of FY24 onwards.
• The company is hopeful to see a turnaround in the markets and continues to invest heavily. These investments are not on the balance sheet but are expensed and are seen as necessary to future-proof the business.

Key Questions asked

Issuer Solution Business Update

• The Issuer Solutions business added 170 new clients in the preceding quarter, bringing the total number of clients closer to 6,000.
• Kintech's market share of the NC funded companies by market cap stands at about 46.5%

Revenue portfolio adjusted for seasonality

Diversification helps to mitigate the impact of cyclical downturns in any particular asset class, client segment, or geography. For example, if the equity markets are down, can still generate revenue from fixed income and mutual funds.

On International And Domestic Alternative Business

The Management does not provide answer to this question.