Shares of KFin Technologies Ltd recorded a notable increase in Thursday's trading session following two substantial block deals. These transactions involved 8.75 percent of the company's total stake, amounting to 1.51 crore shares, which were traded at ₹925 each in pre-market activity. The total value of these block deals reached approximately ₹1,400 crore.
Details of the Share Transactions
Prior to these block deals, reports indicated that General Atlantic, a major investor, intended to offload around 8 percent of its stake in KFin Technologies. The anticipated value for this sale was approximately ₹1,200 crore, with shares priced at ₹919.56 each, representing a 3 percent discount from Wednesday's closing price.
However, the actual block deals executed on the National Stock Exchange (NSE) saw shares trade at a higher price of ₹925. This higher transaction price contributed to KFin Technologies' stock opening 1.69 percent higher at ₹963 on the BSE.
Q1 Performance and Analyst Outlook
For the June quarter, KFin Technologies reported a 30 percent year-on-year growth in its operating revenue. Despite this, total operating expenses rose by 46 percent year-on-year, with employee expenses increasing by 44 percent and other expenses by 52 percent. The company's EBITDA saw a 7 percent year-on-year growth but a 5 percent quarter-on-quarter decline, with an EBITDA margin of 34.2 percent, down from 41.5 percent a year ago.
Brokerage firm MOFSL provided an optimistic outlook, maintaining its FY27 and FY28 earnings estimates for KFin Technologies. The management's FY27 guidance projects an 18-20 percent revenue growth, even amidst a subdued market, attributed to ongoing cost optimization efforts. MOFSL anticipates KFintech's EBITDA and PAT to grow by 17-20 percent and 12-15 percent, respectively, for FY27.
The brokerage firm also expects the consolidated EBITDA margin, including Ascent, to surpass 40 percent by the end of FY26, with Ascent becoming EBITDA-accretive by late FY26 or early FY27 and achieving full-margin convergence over the subsequent 3–5 years. Based on these projections and KFin's Q1 FY27 performance, MOFSL projects revenue, EBITDA, and PAT growth of 22 percent, 22 percent, and 18 percent compounded annually over FY26-28E.
Consequently, MOFSL upgraded its rating on KFin Technologies stock to a 'BUY,' setting a one-year target price of INR 1,150. This upgrade is driven by expectations of continued momentum in the domestic mutual fund business, a robust pipeline for issuer solutions, and gradually improving margins in the international business, which should contribute to overall margin expansion.